Top 5 Value Stocks to Invest In According to ValueAct Capital

3. KKR & Co. Inc. (NYSE: KKR)

Value: $1,540,645,000
Percent of Jeffrey Ubben’s 13F Portfolio: 17.86%
No. of Hedge Fund Holders: 54

Private equity and real estate investment firm KKR & Co. Inc. (NYSE: KKR) has been generating massive returns for investors over the last several years. Its share price soared almost 40% since the beginning of this year, extending twelve-month gains to 123%. The company also offers a dividend yield of just under 1%. ValueAct has been holding a position in KKR since 2017 and the stock holding weighted around 17.87% of the overall portfolio at the end of December.

1 Main Capital, an investment management firm, highlighted a few stocks including KKR, in the first quarter investor letter. Here is what 1 Main Capital stated:

“KKR & Co (KKR) is a top-three global alternative asset manager. Asset management is an exceptionally good business for those that can gather assets. Basically, clients put up most of the capital and the managers get to keep a nice chunk of the profits.

KKR plays in the secularly growing alternative space, focusing on private equity, real estate, infrastructure, and private credit, among other areas. As a leader in its field, KKR benefits from two durable trends:

1. More and more assets are being directed to alternatives, due to their superior return profile and lower reported volatility when compared to traditional public credit and equities.
2. Leaders in alternative asset management, like KKR, are taking market share and getting a disproportionate amount of the inflows into the space.

Given the above dynamics, KKR should be able to grow its revenue and earnings at an attractive rate for as far as the eye can see. I have shared my most recent financial KKR model here, which highlights the path to 4x growth in distributable earnings per share and a $135+ stock by 2025.”