KKR & Co. Inc. (KKR) A Stock to Buy on Insider Confidence?

The KKR & Co. Inc. (NYSE:KKR) bulls won the day, but the reality is that the 0.17 points or 0.73 percent advance gave very little definitive technical indication of where the stock could be headed next. On 12 February, the shares traded at $23.61 with a heavy trade volume of 4.929 million shares. After opening the session at $23.48, the shares went as high as $23.82 and as low as $23.48, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $19.8 billion and now has 836.82 million shares outstanding. KKR & Co. Inc. (KKR) stock has gained 12.97 percent of market value in 21 trading days.

KKR stock has a trailing 3-year beta of 1.67, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.99 a share in the trailing twelve months. The stock’s value has surged 20.28 percent year to date (YTD) against a rise of 11.42 percent in 12 month’s time. The company’s shares still trade -17.81 percent away from its 1-year high of $28.73 and 29.02 percent up from 52-week low of $18.30. The average consensus rating on the company is 1.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

KKR & Co. Inc. (KKR) will probably climb 18.93 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $34 price as 12-month high target. This represents a whopping 44.01 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $29.5, which represents a return potential of 24.95 percent when compared to the closing price of the stock of $23.61 on Tuesday, February 12. The lowest price target for the stock is $22 — slightly more than -6.82 percent from KKR’s current share price.

History has shown that shares in KKR & Co. Inc. have gone up on 18 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. Investors will get their next glimpse of KKR’s Q1 earnings on May 02. Analysts are forecasting revenue to climb 147.2 percent to $1B in the fiscal first quarter, while earnings are seen soaring by nearly 8.89 percent to $0.49 per share. It earned $0.6 per share, better than the $0.57, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.08B, better than the $1B analysts expected. Earnings are estimated to increase by 260.2 percent this year, 11.22 percent next year and continue to increase by -1.08 percent annually for the next 5 years.

Let’s take a look at some insider activity at KKR & Co. Inc. (NYSE:KKR) and see the pattern. The earliest insider trade took place on 02/09/2018. Valueact Holdings, L.P. gathered a total of 500 thousand shares of company at average share price of $21.03. The total for the purchase was set at $10.52 million. After this transaction, the 10% Owner account balance stood at 49.7 million shares. The stock grew 12.27 percent since that insider purchase. On 02/08/2018, Valueact Holdings, L.P., 10% Owner, purchased 1.45 million shares at a price per share of $21.55. This added 31.25 million shares to the insider’s fortune and the stock saw a 9.56 percent rally in value since the news became public. This transaction left 49.2 million shares in the 10% Owner account.

On 08/17/2017, Director Scully Robert W performed a purchase transaction worth $1 million. This purchase at $18.21 each has added 55 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 29.65 percent increase since the transaction was reported. The insider now is left with 104.5 thousand shares remaining in the account. Scully Robert W, who performs the Director job, sold 168.4 thousand shares for $2.39 million. The disposal occurred on 08/02/2016 was priced at $14.22 per share. The share price soared 66.03 percent since the reporting date. Scully Robert W now left with a stake of 43.28 thousand KKR stock worth $1.02 million after the insider selling.

The stock is currently hovering around the first support level of $23.45. Below this, the next support is placed in the zone of $23.3. Till the time, the KKR stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 63.49 on daily chart, which may remain a cause for concern. If the price breaks below $23.3 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $23.79 mark may result into a pull-back move towards $23.98 level.

Shares of KKR & Co. Inc. (KKR) are trading at a P/E ratio of 11.77 times earnings reported for the past 12 months. The industry KKR operates in has an average P/E of 242.78. Its P/E ratio went as low as 9.54X and as high as 25.92 over the 5-year span.Further, it is sporting a 8.25 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.41.