KKR broke out past a buy point of 124.20 on Monday and is in a buy zone. In a positive sign for the breakout, the relative strength line is at a new high. KKR stock is today's selection for IBD 50 Growth Stocks To Watch.
Shares plunged and broke support at the 50-day moving average after second-quarter results were announced July 31. The broad market went into a three-day sell-off at that time, too.
Revenue growth decelerated sharply to 15%, or $4.1 billion, after growing 209% in the prior quarter and 75% to 209% the previous three quarters.
Earnings per share of $1.04 rose 42% from the prior year. The stock recovered after selling off for three days to form a lopsided cup-with-handle base.
Shares carved the base amid several deals: The company acquired six industrial warehouses and Varsity Brands, a sporting goods and uniform manufacturer. It also announced plans to acquire Fuji Soft, a Japan-based provider of operational software and systems. Rival Bain Capital is also making a bid for Fuji Soft.
Volume on the breakout was lighter than average, according to the chart analysis tools on IBD MarketSurge. But the stock's relative strength line is at new highs, giving KKR a blue dot on its MarketSurge charts.
KKR Stock Holds Impressive Ratings
Despite its post-earnings fall, KKR stock holds strong ratings as well. The Relative Strength Rating is 94 while the Composite Rating is nearly ideal at 97. The EPS Rating stands at 91.
KKR is one of the most well-known private equity firms. It invests in companies through buyouts and other strategies. It also invests in real estate and infrastructure.
KKR stock holds first place in the investment management industry group. Mutual funds own 42% of outstanding shares. More funds have been net buyers of the stock over the past five quarters.
The MFS Growth Fund (MFEGX) and the JPMorgan Large Cap Growth Fund (SEEGX) — which have IBD fund ratings of B and A, respectively — are among the nearly 1,800 funds that hold shares of KKR.
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