Jefferies Initiates Coverage On KKR Financial Holdings

Jefferies & Co. is out with a research report on KKR Financial Holdings KFN and is initiating coverage with a $9 price target and a Hold rating. In a note to clients, Jefferies & Co. writes, "KFN trades on a price to book multiple that is highly correlated to underlying investment spreads. During times of attractive investment opportunities (widening spreads), its valuation suffers. During times of weakening investment opportunities (tightening spreads), the stock's valuation improves. Thus, there are good environments for KFN to source investments and there are good environments for investors to own shares of KFN, but these two environments often do not coincide with one another. Our view is that investment spreads will not tighten materially until greater clarity surrounding the recovery of the U.S. economy is visible. Because of this, we are initiating coverage at a Hold rating." Shares of KFN closed at $9.00 yesterday.