We recently compiled a list of the Jim Cramer’s Top 10 Bullish Stock Picks. In this article, we are going to take a look at where KKR & Co Inc. (NYSE:KKR) stands against Jim Cramer’s other bullish stock picks.
In a recent episode of Mad Money, Jim Cramer expressed his enthusiasm for the current market, highlighting a significant historical perspective. He reminded viewers that 20 years ago, Google went public at $85 per share and closed its first day up 18%. While many traders were thrilled by this initial gain, looking back, it was a major missed opportunity. The stock has since delivered a 7,736% return, far exceeding the S&P 500’s return of just over 600%. This example illustrates the potential wealth individual stocks can offer compared to broader indices, especially if you choose wisely.
“Twenty years ago today, Google went public at a split-unadjusted price of $85 per share. On its first day, the stock closed up 18%. Many traders, thrilled by this initial gain, took the profit. In retrospect, this was one of the greatest mistakes of all time. It has since delivered a 7,736% return, compared to the S&P 500’s return of slightly more than 600% with dividends. This serves as a reminder of the wealth that individual stocks can generate compared to indices when you choose wisely. And I’m telling you, it’s not that hard if you know how to research. So, I think it’s time to reconsider the average approach, at least for today.”
Cramer noted that, despite a strong recent performance—with the Dow gaining 237 points, the S&P 500 up 0.97%, and the NASDAQ increasing by 1.39%—the short-term market outlook is more complex. The market is currently on its longest winning streak since November of last year, with 93% of S&P 500 stocks showing gains.
However, he cautioned that the market might be “overbought,” as indicated by the Market Edge oscillator, a tool Cramer has relied on since 1987. When the oscillator reaches plus five or higher, it signals that it might be time to sell. Conversely, readings of minus five or lower indicate oversold conditions, suggesting it’s a good time to buy.
“Even though it was another good day for the markets. we need to consider both the short-term and long-term outlooks. The short-term setup isn’t as favorable. We’re currently on a significant winning streak, with the market having risen for straight days, the longest streak since November of last year. Impressively, 93% of the S&P 500 stocks are up. “
This follows a Monday when the market dropped sharply due to the Yen carry trade imploding, which led to a wave of forced selling and subsequent panic.
“As I’ve often said, panic is not a strategy. Since that panic, the market has mostly been trending upward.”
Jim Cramer has also expressed concern about the upcoming Justice Department case challenging the search engine giant’s role in the advertising exchange market. This legal issue could have a significant negative impact on it, a company that has greatly benefited from this setup. A victory for the Justice Department could be even more damaging than the previous issue with Apple over default search engine payments, which contributed to its monopoly concerns.
According to Cramer, the resilience of tech giants is evident, with strong recoveries even after short-term dips. (see 33 Most Important AI Companies You Should Pay Attention To).
Jim Cramer emphasizes that investing in truly exceptional companies, rather than merely following market indices, usually leads to the best returns. Cramer advises investors to avoid panicking during market fluctuations and to maintain their focus on holding strong companies for long-term success.
“As we move forward, it’s important to remember that investing in truly great companies, rather than just following the index, often yields the best returns. The substantial gain from Google over 20 years exemplifies this. Avoiding panic during market turbulence and sticking with strong companies is crucial for long-term success.”
Our Methodology
In this article, we reviewed a recent episode of Jim Cramer’s Mad Money and highlighted ten stocks that he is optimistic about. We also included information on hedge fund sentiment for each stock and ranked them based on how many hedge funds own each one, starting with the least owned.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A modern looking financial adviser sitting in front of a trading monitor, gesturing to a group of investors.
KKR & Co Inc. (NYSE:KKR)
Number of Hedge Fund Investors: 75
Jim Cramer praised KKR & Co Inc. (NYSE:KKR) in response to a viewer’s question, calling it one of the best-run companies globally. He mentioned that he had the opportunity to meet the CEO at a dinner and was impressed by him, describing him as exceptional. Cramer emphasized his belief that KKR & Co Inc. (NYSE:KKR) is an outstanding company.
“It’s one of the best-run companies in the world. I had the pleasure of meeting the CEO once at dinner—I mean, the guy’s dynamite, and I think it’s a really great company.”
KKR & Co Inc. (NYSE:KKR) is a major global investment firm with a diverse portfolio that spans private equity, credit, real estate, and infrastructure. KKR & Co Inc. (NYSE:KKR)’s revenue comes from management fees, performance fees, and investment income, which provide both stability and growth opportunities. KKR & Co Inc. (NYSE:KKR) has a strong history of successful acquisitions, especially in technology and healthcare, which align with current growth trends and expand its market presence.
As the alternative investment industry expands due to rising interest from institutional and high-net-worth investors, KKR & Co Inc. (NYSE:KKR) is well-positioned to benefit from these trends. With a solid balance sheet and significant cash flow, KKR & Co Inc. (NYSE:KKR) has the financial strength to make new investments, pursue acquisitions, and deliver value to shareholders, setting it up for continued success and growth.
Baron FinTech Fund stated the following regarding KKR & Co. Inc. (NYSE:KKR) in its Q2 2024 investor letter:
“We initiated a position in KKR & Co. Inc. (NYSE:KKR), one of the largest alternative asset managers in the world with $578 billion of assets under management (AUM). We believe alternative asset management is one of the best secular growth areas of financial services, and KKR should be a prime beneficiary. Global alternatives AUM totaled $16.3 trillion at the end of 2023 and grew at an 11% CAGR since 2010, according to Preqin. Annual industry growth is expected to exceed 8% over the next five years with private equity (PE), venture capital, and private credit expected to grow at double-digit annual rates.
Founded in 1976 as one of the earliest leveraged buyout firms, KKR was led for decades by co-founders Henry Kravis and George Roberts. Since going public in 2010 as a pure-play PE firm, KKR has successfully diversified into other private asset classes, including private credit, real estate, and infrastructure investing. AUM has risen nearly 10-fold since 2010 (an 18% CAGR), and PE’s share of firm AUM has shrunk to less than one-third. These non-PE asset classes are less penetrated than PE and provide a substantial runway for KKR to continue growing its funds, fees, and earnings. KKR also has significant growth opportunities in Asia. The firm entered the Asian market in 2005 and has a scaled presence with 570 employees in a region where alternative asset management is far less penetrated compared to Western countries. In 2021, KKR successfully transitioned leadership from Kravis and Roberts to co-CEOs Scott Nuttall and Joe Bae, longtime KKR employees responsible for many of the growth initiatives that are driving KKR’s success today…” (Click here to read the full text)
Overall KKR ranks 5th on our list of Jim Cramer’s top bullish stock picks. While we acknowledge the potential of KKR as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KKR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
