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Analyst Blog

Shares of Kohlberg Kravis Roberts & Co. L.P. (KKR - Snapshot Report) soared to a new 52-week high of $26.10 at the last hour of the trading session on Jan 10. However, the stock closed the session at $25.95, which reflects a solid return of 77.3% over the past one year. The trading volume for the session was 2.2 million shares.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) investment manager has considerable upside left, given its positive estimate revision over the last 60 days.

Growth Drivers

Kohlberg Kravis’ impressive performance was attributable to its healthy fund raising capability and efficient capital deployment activities. Moreover, the company reported strong third-quarter 2013 results comprising a positive earnings surprise of 50.0%.

On Jan 9, 2014, Kohlberg Kravis closed its KKR Special Situations Fund L.P. The company started raising third-party capital against the above-mentioned fund in 2012. Consequently, it garnered a whopping $2.0 billion, which was twice its expectation of $1.0 billion.

Last week, as per a Wall Street Journal report, Kohlberg Kravis is expected to invest a minimum of $500 million in the coming five years in Canada’s energy sector. Earlier, in Dec 2013, the company had declared a 6.8% stake in Marvell Technology Group Ltd. (MRVL - Snapshot Report), a Bermuda-based semiconductor maker.

Kohlberg Kravis is known for its inorganic growth strategies and is always on the lookout for meaningful investment opportunities. The latest stakes, acquisitions and mergers clearly reflect the diverse interests of the company ranging from software to energy sector.

Estimate Revisions Show Potency

In the last 60 days, the Zacks Consensus Estimate for 2013 rose 2.4% to $2.55 per share. For 2014, the Zacks Consensus Estimate advanced roughly 1.0% to $2.50 per share over the same time frame.

Some better-ranked investment managers include Waddell & Reed Financial, Inc. (WDR - Analyst Report) and Affiliated Managers Group Inc. (AMG - Analyst Report). While Waddell & Reed carries a Zacks Rank #1 (Strong Buy), Affiliated Managers has a Zacks Rank #2 (Buy).