Three data points are now pointing the same direction on Apollo Global Management. Short sellers are covering, borrowing costs have collapsed, and options traders are the most bullish they've been all year.
Short interest fell 18.1% in a single week to 3.98% of free float. That's the lowest level in months. Over the same period, APO stock gained 5.3% — the covering and the rally are feeding each other.
The move follows a strong Q2 print on August 4. The stock is now up 16.6% over the past month.
Cost to borrow dropped 70% in one week to just 0.36%. At the start of August it was near 1.2%. The lending market backs the same read: availability sits at 799% — roughly eight shares available for every one currently borrowed. Bears have little to fight with on the mechanics front.
The put-call ratio hit 0.65 on August 11, a 52-week low. That's 3.2 standard deviations below the 20-day mean of 0.77. Call buying has dominated two sessions running. Options sentiment has not been this lopsided toward calls in at least a year.
Since the earnings beat, UBS raised its price target to $172 from $157. Barclays went to $157 from $132. RBC lifted to $146 from $137. The consensus mean target stands at $152.89 — about 9% above the current price of $140.28. Morgan Stanley carries the Street high at $164.
Capital Research added nearly 10 million shares in the most recent reported period, making it the largest external holder at 9.6% of shares outstanding.
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