Pre-Market Activity Shows Heavy Volume And Movement For KKR Financial Holdings (KFN)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified KKR Financial Holdings ( KFN) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified KKR Financial Holdings as such a stock due to the following factors:

  • KFN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.1 million.
  • KFN traded 856,467 shares today in the pre-market hours as of 8:47 AM, representing 51.6% of its average daily volume.

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More details on KFN:

KKR Financial Holdings LLC, together with its subsidiaries, operates as a specialty finance company with expertise in a range of asset classes. The stock currently has a dividend yield of 9.6%. KFN has a PE ratio of 6.6. Currently there are 2 analysts that rate KKR Financial Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for KKR Financial Holdings has been 1.1 million shares per day over the past 30 days. KKR Financial has a market cap of $2.0 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.94 and a short float of 0.8% with 1.27 days to cover. Shares are down 9.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates KKR Financial Holdings as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for KKR FINANCIAL HOLDINGS LLC is currently very high, coming in at 73.47%. Regardless of KFN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KFN's net profit margin of 28.90% significantly outperformed against the industry.
  • The revenue fell significantly faster than the industry average of 13.4%. Since the same quarter one year prior, revenues fell by 38.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Financial Services industry. The net income has significantly decreased by 64.4% when compared to the same quarter one year ago, falling from $111.96 million to $39.89 million.
  • The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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