Jim Cramer on KKR & Co Inc. (KKR) CEO Scott C. Nuttall: ‘This guy is dynamite’

We recently made a list Jim Cramer’s Top 10 Bullish Stock PicksIn this article, we’ll take a look at where KKR & Co Inc. (NYSE:KKR) stacks up against Jim Cramer’s other bullish stock picks.

On a recent episode of Mad Money, Jim Cramer expressed his enthusiasm for the current market, emphasizing 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 that initial gain, looking back, it was a huge missed opportunity. The stock has since returned 7,736%, far exceeding the S&P 500’s return of just over 600%. This example illustrates the potential wealth that individual stocks can offer compared to broader indices, especially if you choose wisely.

“Twenty years ago today, Google went public at $85 per share, straight up. The stock closed up 18% on its first day. Many traders were thrilled by that initial gain and took the profit. In retrospect, it was one of the biggest mistakes in history. Since then, it has returned 7,736%, compared to the S&P 500’s return of just over 600% with dividends. It’s a reminder of the wealth that individual stocks can generate relative to their indexes when you choose wisely. And I’m telling you, it’s not that hard if you know how to do the research. So I think it’s time to reconsider the average approach, at least for now.”

Cramer noted that despite recent strong performance — the Dow gained 237 points, the S&P 500 rose 0.97% and the NASDAQ gained 1.39% — the near-term market outlook is more complex. The market is currently on its longest winning streak since last November, with 93% of S&P 500 stocks showing gains.

But he warned that the market could 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 may be time to sell. Conversely, readings of minus five or lower indicate oversold conditions, suggesting that it is a good time to buy.

“While it was another good day for the markets, we need to consider both the short-term and long-term outlooks. The short-term bias is not as favorable. We are currently on a significant winning streak, with the market up for multiple days in a row, the longest streak since November of last year. Impressively, 93% of the S&P 500 stocks are up.

This comes after the market fell sharply on Monday due to a collapse in the yen carry trade, leading to a wave of forced selling and subsequent panic.

“As I’ve often said, panic is not a strategy. Since the panic, the market has mostly been up.”

Jim Cramer also expressed concern about an upcoming Justice Department case challenging the search engine giant’s role in the ad-exchange market. The legal issue could have a significant negative impact on a company that has benefited greatly from the arrangement. A victory for the Justice Department could be even more damaging than the previous case with Apple over default payments for search engines, which fueled concerns about monopoly.

According to Cramer, the resilience of the tech giants is obvious, and even after short-term declines, there has been a strong economic recovery. (See The 33 Most Important AI Companies You Should Be Paying Attention To).

Jim Cramer emphasizes that investing in truly unique companies, rather than just following market indices, usually leads to the best returns. Cramer advises investors to avoid panic during market volatility and to stay focused on owning strong companies for long-term success.

“As we move forward, it’s important to remember that investing in really great companies, rather than just following an index, often yields the best returns. Google’s significant gain over 20 years is an example of this. Avoiding panic during market turbulence and sticking with strong companies is key to long-term success.”

Our methodology

In this article, we analyzed the latest episode of Jim Cramer’s Mad Money show and highlighted ten stocks he is bullish on. We also included hedge fund sentiment for each stock and sorted them by the number of hedge funds that own each stock, starting with those with the least.

At Insider Monkey, we’re fascinated by the stocks that hedge funds invest in. The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

KKR & Co Inc. (NYSE:KKR)

Number of hedge fund investors: 75

Jim Cramer praised KKR & Co Inc. (NYSE:KKR) in response to a viewer question, calling it one of the best-run companies in the world. He mentioned that he had the opportunity to meet the CEO at dinner and was impressed, describing him as exceptional. Cramer emphasized his belief that KKR & Co Inc. (NYSE:KKR) is an exceptional company.

“It’s one of the best-run companies in the world. I had the pleasure of meeting the CEO once for dinner—I mean, the guy is dynamite and I think it’s a really great company.”

KKR & Co Inc. (NYSE:KKR) is a major global investment firm with a diversified portfolio spanning private equity, credit, real estate and infrastructure. KKR & Co Inc.’s (NYSE:KKR) revenues are derived from management fees, performance fees and investment income, which provide both stability and growth opportunities. KKR & Co Inc. (NYSE:KKR) has a long history of successful acquisitions, particularly in the technology and healthcare space, that align with current growth trends and expand its market presence.

As the alternative investment industry continues to grow due to growing interest from institutional and high net worth investors, KKR & Co Inc. (NYSE:KKR) is well-positioned to benefit from these trends. With a strong balance sheet and healthy cash flow, KKR & Co Inc. (NYSE:KKR) has the financial strength to make new investments, pursue acquisitions and deliver value to shareholders, positioning it for continued success and growth.

In a letter to investors from Q2 2024, Baron FinTech Fund stated:

“We have initiated a position in KKR & Co. Inc. (NYSE:KKR), one of the world’s largest alternative asset managers, with $578 billion in assets under management (AUM). We believe alternative asset management is one of the best growth areas in secular financial services, and KKR should be a key beneficiary. Global alternative AUM was $16.3 trillion at the end of 2023, having grown 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 first 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 investments. Assets under management have increased almost 10-fold since 2010 (18% CAGR), and the firm’s share of assets under management (AUM) has declined to less than one-third. These non-PE asset classes are less penetrated than PE and provide KKR with significant room to continue to grow funds, fees, and earnings. KKR also has significant growth opportunities in Asia. The firm entered Asia in 2005 and has an extensive presence with 570 employees in a region where alternative asset management is significantly less penetrated than in the West. 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 drive KKR’s success today…” (Click here to read the full story)

Total KKR takes 5th place on our list of Jim Cramer’s top bullish stock picks. While we recognize KKR’s potential as an investment, our conviction is based on the belief that AI stocks under the radar offer greater promise for higher returns in a shorter time frame. If you’re looking for AI stocks that are more promising than KKR but are trading at less than 5 times earnings, check out our report on cheapest AI action.

READ MORE: $30 Trillion Opportunity: The 15 Best Humanoid Robot Stocks to Buy, According to Morgan Stanley AND Jim Cramer says NVIDIA has ‘become a wasteland’.

Disclosure: None. This article was originally published on Insider Monkey.