Billionaire Leon Cooperman headed Goldman Sachs Asset Management before founding Omega Advisors in 1991. The fund’s recent 13F disclosed many of its long equity positions as of the end of September (see the full list of stocks reported in the filing). We have gone though the 13F looking for stocks which were not only in the portfolio but also satisfy traditional value criteria; investors may be interested in more information on these companies before deciding if they are worthy of further research. Here is our quick take on five stocks in Cooperman’s portfolio with trailing and forward P/E multiples of 11 or lower where Omega had a position worth at least $100 million:
The fund’s largest position by market value was its 8.1 million shares of American International Group, Inc. (NYSE:AIG), after increasing its holdings by 76% during the quarter. AIG had leaped onto our list of the ten most popular stocks among hedge funds during the third quarter (see the rest of hedge funds’ favorite stocks) after not even being in the top ten three months earlier. Not only does it carry a forward P/E of only 10, the P/B ratio is 0.5 reflecting a large discount to the book value of its equity. AIG probably isn’t worth book value, but we think it deserves to trade closer to that level.
SLM Corp (NASDAQ:SLM), better known as Sallie Mae, manages and processes education loans. Omega owned a bit less than 16 million shares of the stock, which carries trailing and forward P/E multiples of 8 and 7, respectively. Wall Street analysts apparently believe that the company will have considerable earnings growth over the next several years, as the five-year PEG ratio is 0.7, but the market seems less sure and there have been concerns that student loans may prove an asset bubble. Fellow billionaire David Shaw’s D.E. Shaw increased its holdings of Sallie Mae last quarter (check out more of D.E. Shaw’s picks). We might look at the company more closely, as the valuation is appealing, but we’d want to be cautious of the business.