Financial stock KKR is Wednesday's pick for IBD 50 Growth Stocks To Watch as it offers investors another chance to buy after an extended rally. Shares are in the buy zone of a flat base as analysts expect robust profit growth to continue.
KKR is a global investment company that specializes in private equity, infrastructure, real estate and credit markets through its partners and hedge funds. It also offers retirement, life and reinsurance products.
The asset manager holds the No. 2 spot out of 119 stocks in the investment management group, which ranks No. 98 out of 197 IBD industry groups.
Financial Stock KKR Ripe For Picking
KKR stock was nearly unchanged Wednesday as it attempted its fourth straight day of gains. The investment stock is flirting with its all-time high of 107.94 reached on May 15.
The stock rose 5.1% that day and broke out of a flat base with a 103.48 buy point. Shares are in the 5% buy zone up to 108.65, according to MarketSurge chart analysis.
The stock has had a bull run since it broke out of a base with a 64.77 buy point in mid-November. Shares climbed for five straight weeks without taking a break until late December, when it pulled back to form a five-week flat base.
Shares broke out in late January and had another robust run that extended KKR's uptrend. The investment stock then formed its seven-week flat base.
The financial stock has ridden its 10-week moving average since the November breakout without any real tests until early April, when it spent a few weeks below it. Shares have gained about 67% since the November breakout.
Robust Profit Growth Expected To Continue
The financial firm reported better-than-expected first-quarter earnings on May 1. Adjusted quarterly profit growth accelerated to 20%, improving from 4% the prior quarter and three quarters of declines prior to that.
But the highlight was its quarterly revenue, which tripled over the prior year's same quarter. Revenue grew to $9.66 billion from $3.13 billion, with explosive growth coming from its insurance division. KKR reported nearly $578 billion assets under management as of March 31.
Current-quarter FactSet estimates project earnings of $1.08 per share, or 49% growth year over year. Analysts expect quarterly profit growth ranging from 40% to 44% over the following three quarters.
Mutual funds have been adding shares, with 1,521 funds owning KKR stock in March, up from 1,425 in December and 1,252 in September. The financial stock boasts a 94 IBD Composite Rating out of 99, and a 95 Relative Strength Rating.
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