Financials 840

Financial stocks are shining in 2021, bringing home gains of 19.2%.

KKR & Co. Inc. (KKR) | Daily Alert April 2
KKR & Co., formerly Kohlberg Kravis Roberts Co., is a leading global alternative asset manager. The firm manages multiple alternative asset classes including private equity, energy, infrastructure, real estate, credit, as well as hedge funds through strategic partners. It generates revenues from management fees, performance income and investment income with a global reach on five continents.

A booming economy and rising interest rates are a great environment for financial companies. The rest of this year should be very good for the sector. But KKR is also the best player in a massive growth trend in the wealth management industry. Alternative investment is a longer-term trend.

These investments are growing like crazy. Global alternative asset investments have grown from $6.4 trillion in 2012 to about $14 trillion in 2020. It is estimated that alternative assets worldwide will continue to grow to more than $21 trillion by 2025.

I consider KKR to be the best of its peers in the sector. It has blown away the return of its competitors over the past five years, averaging an annual return of 35.86% over the last five years and 36% over the last three. And there are good reasons to believe the outperformance will continue.

KKR had an all-time record fundraising year in 2020, bringing in $44 billion in assets under management for the year. A record $12.5 billion was deployed, or invested, in the fourth quarter. And the firm still has plenty of dry powder going forward.

KKR also made a huge $4.4 billion investment in Global Atlantic Financial Group (GA), a huge player in the insurance industry. The firm’s growth rates have been even more impressive than KKR’s over the past five years and the acquisition could be a needle-mover going forward.

Despite the recent stellar performance, KKR still sells at a price/earnings ratio of less than 14 times. That’s well below the five-year average and less than half of the current S&P 500 price earnings ratio.

The stock has moved sideways for the last six weeks after a big surge and could be consolidating ahead of another move higher in the weeks ahead.
Tom Hutchinson, Cabot Dividend Investor, cabotwealth.com, 978-745-5532, March 24, 2021

*Fidelity National Financial, Inc. (FNF)
Clever Fidelity National Financial continues to be impressive. Earnings grow nicely and steadily. FNF earned $1.89 in 2015 and this year it should earn well over $4.00+ (good gains!!). FNF has a stellar balance sheet, a market cap of more than $11 billion, about $3 billion in debt, and about the same in cash ($2.7 billion).

FNF is acquisitive too, as it just bought another insurance company that should be earnings-accretive right from the get-go. FNF has been smarter than most by embracing technology and moving heavily into the digital age. FNF has been very well run, I see no change in that. I am going to move my buy up to 44. FNF sells for a cheap 8 times earnings and sports strong free-cash-flow.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, April 2, 2021

Fulton Financial Corporation (FULT)| Daily Alert April 14
Fulton Financial Corporation is a financial holding company that operates through six banking subsidiaries, primarily located in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia.

FULT is expected to consolidate its six subsidiary banks into a single subsidiary bank to reorient its business model away from geographical boundaries towards customer segments. As a result, centralized risk management and better targeted services will likely improve operating efficiency.

Fulton’s loan portfolio is largely concentrated in commercial and multifamily real estate, residential mortgage, home equity, and construction and development. FULT has paid uninterrupted dividends since 1983.

Fulton Financial April 2021

Source: IQTrends.com

Kelley Wright, IQ Trends, iqtrends.com, info@iqtrends.com, 866.927.5250, First April 2021

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