Intrinsic value of KKR - KKR

Previous Close

$22.55

  Intrinsic Value

$1.78

stock screener

  Rating & Target

str. sell

-92%

Previous close

$22.55

 
Intrinsic value

$1.78

 
Up/down potential

-92%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as KKR.

We calculate the intrinsic value of KKR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  82.76
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,908
  1,946
  1,991
  2,042
  2,100
  2,163
  2,233
  2,309
  2,391
  2,480
  2,575
  2,677
  2,786
  2,901
  3,024
  3,155
  3,293
  3,439
  3,594
  3,758
  3,930
  4,113
  4,305
  4,507
  4,721
  4,945
  5,182
  5,431
  5,693
  5,969
  6,259
Variable operating expenses, $m
 
  3,487
  3,567
  3,659
  3,761
  3,875
  4,000
  4,136
  4,283
  4,442
  4,612
  4,785
  4,979
  5,186
  5,406
  5,639
  5,886
  6,147
  6,424
  6,716
  7,025
  7,351
  7,694
  8,056
  8,437
  8,839
  9,262
  9,707
  10,175
  10,668
  11,187
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,695
  3,487
  3,567
  3,659
  3,761
  3,875
  4,000
  4,136
  4,283
  4,442
  4,612
  4,785
  4,979
  5,186
  5,406
  5,639
  5,886
  6,147
  6,424
  6,716
  7,025
  7,351
  7,694
  8,056
  8,437
  8,839
  9,262
  9,707
  10,175
  10,668
  11,187
Operating income, $m
  213
  -1,541
  -1,576
  -1,617
  -1,662
  -1,712
  -1,767
  -1,827
  -1,892
  -1,962
  -2,036
  -2,108
  -2,193
  -2,284
  -2,381
  -2,484
  -2,593
  -2,708
  -2,830
  -2,959
  -3,095
  -3,238
  -3,389
  -3,549
  -3,717
  -3,894
  -4,080
  -4,276
  -4,482
  -4,699
  -4,928
EBITDA, $m
  213
  -1,490
  -1,525
  -1,564
  -1,608
  -1,657
  -1,710
  -1,768
  -1,831
  -1,899
  -1,972
  -2,050
  -2,133
  -2,222
  -2,316
  -2,416
  -2,522
  -2,634
  -2,753
  -2,878
  -3,010
  -3,150
  -3,297
  -3,452
  -3,615
  -3,787
  -3,969
  -4,159
  -4,360
  -4,571
  -4,793
Interest expense (income), $m
  773
  760
  710
  740
  775
  813
  856
  903
  954
  1,009
  1,069
  1,132
  1,201
  1,274
  1,351
  1,434
  1,521
  1,614
  1,712
  1,816
  1,926
  2,042
  2,164
  2,293
  2,429
  2,572
  2,723
  2,881
  3,048
  3,224
  3,409
Earnings before tax, $m
  975
  -2,301
  -2,287
  -2,357
  -2,437
  -2,525
  -2,623
  -2,730
  -2,846
  -2,971
  -3,105
  -3,240
  -3,394
  -3,558
  -3,732
  -3,918
  -4,114
  -4,322
  -4,542
  -4,775
  -5,020
  -5,280
  -5,553
  -5,841
  -6,145
  -6,465
  -6,802
  -7,157
  -7,531
  -7,924
  -8,337
Tax expense, $m
  24
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  309
  -2,301
  -2,287
  -2,357
  -2,437
  -2,525
  -2,623
  -2,730
  -2,846
  -2,971
  -3,105
  -3,240
  -3,394
  -3,558
  -3,732
  -3,918
  -4,114
  -4,322
  -4,542
  -4,775
  -5,020
  -5,280
  -5,553
  -5,841
  -6,145
  -6,465
  -6,802
  -7,157
  -7,531
  -7,924
  -8,337

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,134
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  39,003
  35,385
  36,199
  37,129
  38,173
  39,331
  40,600
  41,983
  43,480
  45,092
  46,823
  48,674
  50,650
  52,753
  54,988
  57,360
  59,874
  62,535
  65,349
  68,322
  71,461
  74,774
  78,267
  81,949
  85,829
  89,915
  94,217
  98,745
  103,510
  108,523
  113,796
Adjusted assets (=assets-cash), $m
  34,869
  35,385
  36,199
  37,129
  38,173
  39,331
  40,600
  41,983
  43,480
  45,092
  46,823
  48,674
  50,650
  52,753
  54,988
  57,360
  59,874
  62,535
  65,349
  68,322
  71,461
  74,774
  78,267
  81,949
  85,829
  89,915
  94,217
  98,745
  103,510
  108,523
  113,796
Revenue / Adjusted assets
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
Average production assets, $m
  411
  418
  428
  439
  451
  465
  480
  496
  514
  533
  554
  576
  599
  624
  650
  678
  708
  739
  773
  808
  845
  884
  926
  969
  1,015
  1,063
  1,114
  1,168
  1,224
  1,283
  1,346
Working capital, $m
  0
  -4,217
  -4,314
  -4,425
  -4,550
  -4,688
  -4,839
  -5,004
  -5,182
  -5,374
  -5,581
  -5,801
  -6,037
  -6,287
  -6,554
  -6,837
  -7,136
  -7,453
  -7,789
  -8,143
  -8,517
  -8,912
  -9,328
  -9,767
  -10,229
  -10,716
  -11,229
  -11,769
  -12,337
  -12,934
  -13,563
Total debt, $m
  18,544
  17,327
  18,060
  18,897
  19,837
  20,879
  22,021
  23,266
  24,613
  26,064
  27,622
  29,288
  31,066
  32,959
  34,971
  37,105
  39,368
  41,763
  44,295
  46,971
  49,796
  52,777
  55,921
  59,235
  62,727
  66,404
  70,276
  74,352
  78,640
  83,152
  87,897
Total liabilities, $m
  33,063
  31,846
  32,579
  33,416
  34,356
  35,398
  36,540
  37,785
  39,132
  40,583
  42,141
  43,807
  45,585
  47,478
  49,490
  51,624
  53,887
  56,282
  58,814
  61,490
  64,315
  67,296
  70,440
  73,754
  77,246
  80,923
  84,795
  88,871
  93,159
  97,671
  102,416
Total equity, $m
  5,940
  3,538
  3,620
  3,713
  3,817
  3,933
  4,060
  4,198
  4,348
  4,509
  4,682
  4,867
  5,065
  5,275
  5,499
  5,736
  5,987
  6,254
  6,535
  6,832
  7,146
  7,477
  7,827
  8,195
  8,583
  8,991
  9,422
  9,875
  10,351
  10,852
  11,380
Total liabilities and equity, $m
  39,003
  35,384
  36,199
  37,129
  38,173
  39,331
  40,600
  41,983
  43,480
  45,092
  46,823
  48,674
  50,650
  52,753
  54,989
  57,360
  59,874
  62,536
  65,349
  68,322
  71,461
  74,773
  78,267
  81,949
  85,829
  89,914
  94,217
  98,746
  103,510
  108,523
  113,796
Debt-to-equity ratio
  3.122
  4.900
  4.990
  5.090
  5.200
  5.310
  5.420
  5.540
  5.660
  5.780
  5.900
  6.020
  6.130
  6.250
  6.360
  6.470
  6.580
  6.680
  6.780
  6.870
  6.970
  7.060
  7.140
  7.230
  7.310
  7.390
  7.460
  7.530
  7.600
  7.660
  7.720
Adjusted equity ratio
  0.052
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  309
  -2,301
  -2,287
  -2,357
  -2,437
  -2,525
  -2,623
  -2,730
  -2,846
  -2,971
  -3,105
  -3,240
  -3,394
  -3,558
  -3,732
  -3,918
  -4,114
  -4,322
  -4,542
  -4,775
  -5,020
  -5,280
  -5,553
  -5,841
  -6,145
  -6,465
  -6,802
  -7,157
  -7,531
  -7,924
  -8,337
Depreciation, amort., depletion, $m
  0
  51
  52
  53
  54
  55
  57
  59
  60
  62
  64
  58
  60
  62
  65
  68
  71
  74
  77
  81
  85
  88
  93
  97
  101
  106
  111
  117
  122
  128
  135
Funds from operations, $m
  -3,159
  -2,251
  -2,235
  -2,304
  -2,383
  -2,470
  -2,566
  -2,671
  -2,785
  -2,908
  -3,041
  -3,183
  -3,334
  -3,496
  -3,667
  -3,850
  -4,043
  -4,248
  -4,465
  -4,694
  -4,936
  -5,191
  -5,461
  -5,745
  -6,044
  -6,359
  -6,691
  -7,041
  -7,408
  -7,795
  -8,202
Change in working capital, $m
  -1,597
  -83
  -97
  -111
  -124
  -138
  -151
  -165
  -178
  -192
  -206
  -221
  -235
  -251
  -266
  -283
  -300
  -317
  -335
  -354
  -374
  -395
  -416
  -439
  -462
  -487
  -513
  -540
  -568
  -597
  -628
Cash from operations, $m
  -1,562
  -2,168
  -2,138
  -2,193
  -2,258
  -2,332
  -2,415
  -2,506
  -2,607
  -2,716
  -2,835
  -2,962
  -3,099
  -3,245
  -3,401
  -3,567
  -3,744
  -3,931
  -4,129
  -4,340
  -4,562
  -4,796
  -5,044
  -5,306
  -5,581
  -5,872
  -6,178
  -6,501
  -6,840
  -7,198
  -7,574
Maintenance CAPEX, $m
  0
  -41
  -42
  -43
  -44
  -45
  -47
  -48
  -50
  -51
  -53
  -55
  -58
  -60
  -62
  -65
  -68
  -71
  -74
  -77
  -81
  -85
  -88
  -93
  -97
  -101
  -106
  -111
  -117
  -122
  -128
New CAPEX, $m
  -63
  -7
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -54
  -56
  -59
  -62
Cash from investing activities, $m
  -63
  -48
  -52
  -54
  -56
  -59
  -62
  -64
  -68
  -70
  -73
  -77
  -81
  -85
  -88
  -93
  -98
  -102
  -107
  -112
  -118
  -124
  -129
  -137
  -143
  -149
  -157
  -165
  -173
  -181
  -190
Free cash flow, $m
  -1,625
  -2,217
  -2,190
  -2,247
  -2,314
  -2,391
  -2,476
  -2,571
  -2,674
  -2,787
  -2,908
  -3,039
  -3,180
  -3,330
  -3,490
  -3,660
  -3,841
  -4,033
  -4,237
  -4,452
  -4,680
  -4,920
  -5,174
  -5,442
  -5,724
  -6,022
  -6,336
  -6,666
  -7,014
  -7,380
  -7,765
Issuance/(repayment) of debt, $m
  2,116
  -1,217
  732
  837
  940
  1,042
  1,143
  1,244
  1,347
  1,451
  1,557
  1,666
  1,778
  1,893
  2,012
  2,135
  2,262
  2,395
  2,532
  2,676
  2,825
  2,981
  3,144
  3,314
  3,492
  3,677
  3,872
  4,075
  4,288
  4,512
  4,746
Issuance/(repurchase) of shares, $m
  432
  4,034
  2,368
  2,450
  2,541
  2,641
  2,750
  2,868
  2,995
  3,132
  3,278
  3,425
  3,592
  3,768
  3,956
  4,155
  4,365
  4,588
  4,823
  5,072
  5,334
  5,611
  5,902
  6,210
  6,533
  6,874
  7,233
  7,610
  8,007
  8,425
  8,864
Cash from financing (excl. dividends), $m  
  3,394
  2,817
  3,100
  3,287
  3,481
  3,683
  3,893
  4,112
  4,342
  4,583
  4,835
  5,091
  5,370
  5,661
  5,968
  6,290
  6,627
  6,983
  7,355
  7,748
  8,159
  8,592
  9,046
  9,524
  10,025
  10,551
  11,105
  11,685
  12,295
  12,937
  13,610
Total cash flow (excl. dividends), $m
  1,769
  601
  911
  1,040
  1,167
  1,292
  1,417
  1,542
  1,668
  1,796
  1,927
  2,052
  2,190
  2,332
  2,478
  2,630
  2,787
  2,950
  3,119
  3,296
  3,480
  3,672
  3,872
  4,082
  4,301
  4,530
  4,769
  5,020
  5,282
  5,557
  5,845
Retained Cash Flow (-), $m
  -393
  -4,034
  -2,368
  -2,450
  -2,541
  -2,641
  -2,750
  -2,868
  -2,995
  -3,132
  -3,278
  -3,425
  -3,592
  -3,768
  -3,956
  -4,155
  -4,365
  -4,588
  -4,823
  -5,072
  -5,334
  -5,611
  -5,902
  -6,210
  -6,533
  -6,874
  -7,233
  -7,610
  -8,007
  -8,425
  -8,864
Prev. year cash balance distribution, $m
 
  4,134
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  701
  -1,457
  -1,410
  -1,374
  -1,349
  -1,334
  -1,326
  -1,327
  -1,336
  -1,351
  -1,373
  -1,402
  -1,437
  -1,478
  -1,525
  -1,579
  -1,638
  -1,704
  -1,776
  -1,854
  -1,939
  -2,030
  -2,128
  -2,233
  -2,344
  -2,464
  -2,590
  -2,725
  -2,868
  -3,019
Discount rate, %
 
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.60
  17.43
  18.30
  19.22
  20.18
  21.19
  22.24
  23.36
  24.52
  25.75
  27.04
  28.39
  29.81
  31.30
  32.87
  34.51
  36.23
  38.05
  39.95
  41.95
  44.04
PV of cash for distribution, $m
 
  633
  -1,178
  -1,009
  -862
  -732
  -619
  -519
  -432
  -356
  -291
  -235
  -187
  -146
  -113
  -85
  -63
  -46
  -33
  -23
  -15
  -10
  -7
  -4
  -2
  -1
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  58.3
  48.0
  39.4
  32.3
  26.5
  21.6
  17.6
  14.3
  11.6
  9.4
  7.7
  6.2
  5.0
  4.0
  3.2
  2.6
  2.1
  1.7
  1.3
  1.1
  0.9
  0.7
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1

KKR & CO. L.P. (KKR) is a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds. The Company's business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities. It operates and reports its combined credit and hedge funds businesses through the Public Markets segment. The Capital Markets segment consists primarily of its global capital markets business. Through its Principal Activities segment, the Company manages the firm's assets and deploys capital.

FINANCIAL RATIOS  of  KKR (KKR)

Valuation Ratios
P/E Ratio 33
Price to Sales 5.3
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow -6.5
Price to Free Cash Flow -6.3
Growth Rates
Sales Growth Rate 82.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -62.7%
Cap. Spend. - 3 Yr. Gr. Rate 35.1%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 312.2%
Total Debt to Equity 312.2%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 1.5%
Return On Total Capital 1.3%
Ret/ On T. Cap. - 3 Yr. Avg. 2.8%
Return On Equity 5.4%
Return On Equity - 3 Yr. Avg. 8.7%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 91.6%
EBITDA Margin - 3 Yr. Avg. 386.4%
Operating Margin 11.2%
Oper. Margin - 3 Yr. Avg. -55.3%
Pre-Tax Margin 51.1%
Pre-Tax Margin - 3 Yr. Avg. 351.5%
Net Profit Margin 16.2%
Net Profit Margin - 3 Yr. Avg. 35.3%
Effective Tax Rate 2.5%
Eff/ Tax Rate - 3 Yr. Avg. 1.6%
Payout Ratio 99.7%

KKR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KKR stock intrinsic value calculation we used $1908 million for the last fiscal year's total revenue generated by KKR. The default revenue input number comes from 2016 income statement of KKR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our KKR stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.7%, whose default value for KKR is calculated based on our internal credit rating of KKR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of KKR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of KKR stock the variable cost ratio is equal to 179.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for KKR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.1% for KKR.

Corporate tax rate of 27% is the nominal tax rate for KKR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the KKR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for KKR are equal to 21.5%.

Life of production assets of 10 years is the average useful life of capital assets used in KKR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for KKR is equal to -216.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5940 million for KKR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 821.462 million for KKR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of KKR at the current share price and the inputted number of shares is $18.5 billion.

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BGFV Big 5 Sporting 6.15 8.70  hold

COMPANY NEWS

▶ Berkshires Payouts Are Expected to Remain Weak   [Jan-15-18 10:32AM  Market Realist]
▶ Oil Prices and Energy Consumption Key for Berkshire in 4Q17   [Jan-12-18 02:20PM  Market Realist]
▶ [$$] The Add-On Deal Roundup: Jan. 11   [Jan-11-18 12:59PM  The Wall Street Journal]
▶ KKR Releases 2018 Global Macro Outlook   [07:00AM  Business Wire]
▶ KKR's Rosenberg Says Tax Overhaul Is Positive for Real Estate   [Jan-10-18 01:59PM  Bloomberg Video]
▶ KKR Creates a New Platform of Autism Clinics   [10:56AM  Bloomberg Video]
▶ KKR Launches Aggressive New Real-Estate Fund   [Jan-09-18 06:09PM  The Wall Street Journal]
▶ New KKR fund closes with $2.24 billion in capital commitments   [02:30PM  American City Business Journals]
▶ KKR Closes $2.24 Billion Global Private Credit Fund   [Jan-08-18 05:05PM  Business Wire]
▶ Blog Exposure KKR to Acquire PetVet Care Centers   [Dec-29-17 07:50AM  ACCESSWIRE]
▶ Building the Biggest High-Yield BDC   [Dec-27-17 07:30PM  Motley Fool]
▶ KKR to Acquire PetVet Care Centers   [07:00AM  Business Wire]
▶ PE Firms in for Bumpy Ride as Subprime Auto Defaults Soar   [Dec-21-17 12:29PM  Bloomberg Video]
▶ Why Unilever Isn't Spreading Its Bets   [Dec-18-17 04:47PM  Motley Fool]
▶ Deals of the day-Mergers and acquisitions   [Dec-15-17 04:00PM  Reuters]
▶ KKR Goes on a Margarine Binge   [01:42PM  Bloomberg]
▶ KKR Agrees to Buy Unilever's Spreads Business   [12:37PM  Bloomberg Video]
▶ Which Alternative Asset Manager Has Higher Valuations?   [Dec-14-17 12:31PM  Market Realist]
▶ Why Is KKR So Positive about the Healthcare Sector?   [Dec-13-17 09:02AM  Market Realist]
▶ [$$] KKR Bolsters Its Direct Lending Business   [Dec-12-17 04:59PM  The Wall Street Journal]
▶ KKR seeks stockholder approval for $18 billion BDC partnership   [Dec-11-17 01:07PM  American City Business Journals]
▶ KKR Takes Over $4.1 Billion Blackstone-Managed BDC   [09:58AM  The Wall Street Journal]
▶ KKR Completes Tender Offer for Hitachi Kokusai   [Dec-09-17 07:17AM  Business Wire]
▶ KKR picks up New Jersey manufacturer on heels of PharMerica deal   [02:40PM  American City Business Journals]
▶ KKR to Acquire Hyperion from Sandvik   [09:59AM  Business Wire]
▶ Sarnoff Says KKR's Investment in UFC Is About Content   [Dec-05-17 11:37AM  Bloomberg Video]
▶ KKR Announces New Members and Managing Directors   [Nov-30-17 04:49PM  Business Wire]
▶ [$$] KKR-Led Group to Sell Aricent for 1.73 Billion   [11:47AM  The Wall Street Journal]
▶ [$$] KKR Teams Up With Executive to Buy Industrials Businesses   [Nov-29-17 01:56PM  The Wall Street Journal]
▶ 7 Stocks to Double Your Money   [Nov-28-17 03:02PM  InvestorPlace]
▶ [$$] Out of Africa: KKR Disbands African Private-Equity Team   [Nov-24-17 07:43PM  The Wall Street Journal]
▶ [$$] Zuckerbergs Wealth Manager Wants to Be a Buyout Shop   [Nov-22-17 12:01AM  The Wall Street Journal]
▶ Insurgent Litt Challenges Saks Owner's 'White Squire'   [Nov-19-17 03:40PM  TheStreet.com]
▶ KKR Raises $299 Million Paring Stake in Qingdao Haier   [Nov-13-17 10:10PM  Bloomberg]
Financial statements of KKR
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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