We recently compiled a list of the 10 Best Revenue Growth Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where KKR & Co. Inc. (NYSE:KKR) stands against the other revenue growth stocks.
Outlook for the Year 2025: A Positive Year for Equities?
Citigroup has forecasted 2025 to be a positive and strong year for global stocks. Citi expects a rally in global equities to extend into the year 2025 and estimates a 10% EPS growth for global equities which is slightly below analysts’ consensus of 13%.
The stance was that declining interest rates and easing inflation could help boost corporate earnings. The major world stock benchmark, MSCI All Country World Index Local, is expected to reach 1,140 points by the end of this year which signals a 10% increase from its previous close of 1,035.46. Citi added that the United States and emerging market regions could witness the most robust earnings per share growth of about 15%.
Citi remains ‘overweight’ on U.S. equities but believes that the new Trump administration brings a lot of uncertainty with potential tariffs, tax cuts, and deregulation resulting in a ‘complicated mix of favorable and adverse economic effects’. In 2024, the S&P 500 index rallied 24%, driven by the expected Fed rate cuts, optimism relating to Artificial Intelligence, and the potential deregulation under the new US President-elect. Regarding the effect of these drivers on 2025, Citigroup analysts stated:
“While AI is no longer expected to provide as much EPS growth advantage vs. the rest of the index, any continuation of USD strength and policy uncertainty on tariffs could extend its outperformance”
Our Methodology:
In order to compile a list of the 10 best revenue growth stocks to buy according to hedge funds, we first used a stock screener to screen stocks that have more than $2 billion market cap and at least 25% revenue growth over the past 5 years. Moving on, we shortlisted the top 10 stocks from our list which had the highest revenue growth and were the most popular among hedge funds. The 10 best revenue growth stocks to buy according to hedge funds have been arranged in ascending order of their hedge fund sentiment, as of Q3.
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).
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KKR & Co. Inc. (NYSE:KKR)
Number of Hedge Fund Holders: 66
5-Year Revenue Growth: 42.50%
KKR & Co. Inc. (NYSE:KKR) is a leading global investment firm investing across private markets in every asset class worldwide. The firm offers alternative asset management, capital markets, and insurance solutions. KKR was founded in 1976 by George Roberts, Henry Kravis, and Jerome Kohlberg. The firm operates through segments including Asset Management, Insurance, and Strategic Holdings.
KKR is positioned in a growing alternative asset management industry. While Asia Pacific is the driver of global growth and boasts a significant runway for alternatives, KKR is the leading franchise in the region in addition to being the leading franchise in Japan, one of the largest global economies as well as one of the largest life and annuity markets globally. Other growth drivers include the global need for infrastructure and individuals managing their retirement wealth.
With a purpose-built business model with three growth engines, Asset Management, Insurance, and Strategic Holdings, the firm set itself to drive recurring earnings. KKR recorded a strong third quarter of 2024, highlighted by an over 50% year-over-year growth in adjusted net income as well as Total Operating Earnings (TOE-the sum of Fee Related Earnings, Insurance Operating Earnings and Strategic Holdings Operating Earnings) up, 71% year-over-year. Although most of the rise in TOE over the last 12 months was due to the growth in Fee Related Earnings, the firm expects Strategic Holdings Operating Earnings to contribute more to TOE over time.
Overall KKR ranks 9th on our list of the best revenue growth stocks to buy according to hedge funds. While we acknowledge the potential of KKR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
