Bullish Case: Improved AUM due to strategic diversification may boost revenues. The current low implied volatility could signal a recovery phase for APAM, supported by positive analyst sentiment on alternatives investments.

Bearish Case: Cost pressures and high payout ratios could sustain downward pressure on margins. Elevated implied volatility and bearish trading volumes indicate cautious market sentiment, potentially weighing on APAM's price further.

Potential Outcomes:

1. AUM growth (30% prob).

2. Cost pressures affect margins (35% prob).

3. Volatility impacts flows (25% prob).

4. Dividend adjustments due to sustainability issues (10% prob).

Trading Oracle: Consider a bearish debit spread by buying the $50 call and selling the $55 call, expiration in ~143 days. High volatility and declining market sentiment suggest this strategy offers favorable odds (72% profit chance), targeting limited upside. This positions for a high reward relative to risk, focusing on potential stagnation in APAM's growth.

November 14, 2024