Insider trades can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its executives and directors.
In this report, we are going to highlight some interesting insider buying at KKR & Co Inc (KKR:US). KKR is a global investment firm that offers alternative asset management, capital markets, and insurance solutions. The company, which operates in 21 cities worldwide, has assets under management of around $500 billion. It is listed on the New York Stock Exchange and currently has a market cap of $48.7 billion.
Insider buying at KKR & Co.
Our insider transaction data shows that on August 8, board member Matthew Cohler bought 18,710 KKR shares at a price of $52.99 per share. This trade cost the insider approximately $1 million and increased his holding to 86,837 shares.
We have noted before that Mr. Cohler is an experienced investor. Currently, he is on the investment committee at the Chan Zuckerberg Initiative and the Yale Investments Office. Previously, he was General Partner at venture capital firm Benchmark, where he led early-stage investments in internet and software startup businesses. Given his background, it’s fair to assume that he knows what he is doing here.
What stands out about this recent purchase is that it has boosted the size of the insider’s holding by 27%. The fact that Mr. Cohler has upped his stake by such a large percentage suggests that he is very confident the stock is undervalued right now.
KKR & Co shares have fallen in the market sell-off this year. Year to date, the stock is down around 23%. This reflects the fact that the valuation reset throughout the capital markets has resulted in a hit to earnings. For the second quarter of 2022, fee related earnings were $461 million, down 2% year over year.
However, the Q2 results showed that KKR continues to grow. During the quarter, the group raised $25 billion in new capital. Meanwhile, at the end of the period, assets under management were $491 billion, up 14% year over year, while fee paying assets under management were $384 billion, up 20% year over year.
“Our business momentum continues — we raised $25 billion of new capital in the second quarter and $52 billion in the first half. We also continue to grow and diversify — Real Assets AUM has increased over 50% to $114 billion over the last 12 months. With solid business fundamentals and a record $115 billion of dry powder, we continue to be well positioned against a complex backdrop,” commented Co-Chief Executive Officers Joseph Y. Bae and Scott C. Nuttall in the Q2 results.
In light of the business growth here, we see the insider buying as a bullish indicator.