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Why KKR & Co. (KKR) Stock Is Up Today

Stocks in this article: KKR

NEW YORK (TheStreet) -- Shares of KKR & Co. LP  (KKR) are up 1.48% to $25.06 after it announced acquiring a 24.9% interest in BlackGold Capital Management.

Financial terms of the transaction were not disclosed.

Meanwhile, KKR will spend also spend around $175M from its European buyout fund to acquire minority stakes in Swiss online marketplaces for cars and homes, the Wall Street Journal reports.

KKR will acquire 49% of Scout24 Schwiez AG, which operates car and real estate websites, and Omnimedia AG, an online advertising agency, from Ringier AG, the Journal said.

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Separately, TheStreet Ratings team rates KKR & CO LP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate KKR & CO LP (KKR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, solid stock price performance, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • KKR's very impressive revenue growth greatly exceeded the industry average of 5.1%. Since the same quarter one year prior, revenues leaped by 87.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 8.6% when compared to the same quarter one year prior, going from $193.44 million to $210.04 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • KKR & CO LP's earnings per share declined by 5.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KKR & CO LP increased its bottom line by earning $2.29 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.72 versus $2.29).
  • The gross profit margin for KKR & CO LP is rather low; currently it is at 17.52%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, KKR's net profit margin of 37.40% significantly outperformed against the industry.
  • You can view the full analysis from the report here: KKR Ratings Report
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