I pride myself on being a contrarian investor. Given the election rhetoric around the "1%" and the excesses of Wall Street, what could be more contrarian that investing with the original "Barbarians at the Gate"? However, Kohlberg Kravis Roberts & Co. (KKR) not only has a cheap valuation, but also provides a robust 5% yield and improving technicals.
"Kohlberg Kravis Roberts & Co. is a private equity and venture capital firm specializing in acquisitions, leveraged buyouts, management buyouts, special situations, growth equity, mature, and middle market investments" (Business description from Yahoo Finance)
6 reasons KKR is a good pick up for income and value investors at $13 a share:
- KKR yields over 5% based on the last four quarterly payouts.
- Insiders have bought $1mm in new shares in the last nine months, all at higher prices.
- The eleven analysts that cover the stock have a $17 a share median price target on the stock. Oppenheimer just upgraded the stock to "outperform" and Argus initiated the shares as a "Buy" in June.
- The stock has a very low five year projected PEG (.25) and is cheap at just under 6 times forward earnings.
- KKR crushed earnings estimates during its last earnings report and Goldman Sachs and Deutsche Bank recently upped their quarterly earnings estimates on the stock.
- The stock looks like it has bottomed and has some momentum. It recently crossed its 50 day moving average (See Chart).
(click to enlarge)
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in KKR over the next 72 hours.
