We recently compiled a list of the Jim Cramer’s Lightning Round: 7 Stocks Under the Spotlight. In this article, we are going to take a look at where KKR & Co. Inc. (NYSE:KKR) stands against the other stocks featured in Jim Cramer’s Lightning Round.
Jim Cramer, the host of Mad Money, offered his insights into the market’s recent performance, highlighting why the tech-heavy Nasdaq failed to make a strong rebound. He pointed to a unique combination of factors contributing to the setback: the influence of the U.S. government and the actions of Mark Zuckerberg. Cramer drew a parallel between the tech sector and the pharmaceutical industry, which similarly faces increasing scrutiny and restrictions from federal authorities.
After attending the JPMorgan Healthcare Conference, Cramer expressed his optimism about the future of medicine. Despite the promising developments in the healthcare space, he pointed out that the U.S. government doesn’t appear to be particularly favorable toward executives in the industry, who are investing heavily in research and development. He noted that while these companies are spending billions on R&D, they still find themselves under fire, with the Biden administration targeting major drugs as part of the Inflation Reduction Act.
“We are in some weird moment where the two best industries we have are in the crosshairs of the federal government with Mark Zuckerberg aiding and abetting the prosecution. The drug companies managed to rally today because we heard their side of the story. But tech, the tag team of the government and Meta may have been too much for everyone. At the end of the day though, buyers finally came in to find bargains in the semis and software and the drug stocks, only the drug stocks finished in the green.”
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“At the same time, I sure didn’t like what I saw when I watched the Joe Rogan Experience this weekend when a very unfettered Mark Zuckerberg… took some shots, I would say cheap shots, I mean just terrible, at Apple that made me want to throw a yellow flag 15 yards on sportsmanlike conduct.”
What bothered Cramer even more, however, was the U.S. government’s increasing intervention in the semiconductor industry, which he felt undermined the efforts of experts like Jensen Huang. Over the weekend, new restrictions were put in place that limited the number of GPUs companies could sell, further complicating the situation for the tech sector.
“The bottom line: Are the charges against these two industries just glancing blows? Nah, this was just one day where the bond market didn’t crush every stock.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 13. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in 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 Holders: 66
Cramer said that he would be a buyer of KKR & Co. Inc. (NYSE:KKR) and called the management smart.
“I am gonna say that I like the stock very much and I think those guys are so smart. I would be a buyer… At one point it was down really big today. That made no sense to me whatsoever.”
KKR & Co. (NYSE:KKR) is a private equity and real estate investment firm specializing in a wide range of investments, including acquisitions, leveraged buyouts, growth equity, and distressed assets. According to management, the firm remains focused on portfolio optimization and continues to explore various avenues to maximize value for its stakeholders. Recently, it was reported that the company is considering selling its stake in Viridor Ltd., a U.K. waste management company.
The deal has a potential valuation of £7 billion, though discussions are still in early stages and a sale may not occur until 2025. Viridor generated around £400 million in annual EBITDA. Additionally, KKR is engaged in a competitive bidding process to take Fuji Soft, a Japanese IT services firm, private, having outbid Bain Capital with a $4 billion offer. KKR’s bid, which acquired 34% of Fuji Soft, was supported by the company’s board, while Bain moved forward with a hostile bid, asserting shareholder interests and challenging the use of confidential information.
During KKR & Co.’s (NYSE:KKR) Q3 earnings call, management provided an updated outlook, affirming its commitment to achieving significant growth over the next several years. It has guided toward operating earnings of over $300 million by 2026, more than $600 million by 2028, and exceeding $1 billion by 2030. Management expressed confidence in its ability to meet these targets, stating that its conviction in the company’s capacity to achieve these goals has only strengthened since the initial guidance was issued.
Overall KKR ranks 1st on our list of the stocks featured in Jim Cramer’s Lightning Round. While we acknowledge the potential of KKR as an investment, our conviction lies in the belief that 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.
