Billionaire Leon Cooperman’s Latest Stock Picks: Qualcomm, AIG, SLM

OMEGA ADVISORSBillionaire Leon Cooperman’s Omega Advisors has filed its 13F with the SEC for the second quarter of 2012. 13F filings disclose many of the large long positions that hedge funds and other large investors hold as of the end of the quarter, allowing us at Insider Monkey to see many of their stock positions and draw conclusions about what these successful investors might be thinking. Omega didn’t reduce any of its large positions from the previous quarter, but it did make some large additions. Here are some trends that we see in Omega’s portfolio for this quarter versus last quarter:

Student loans. For the second quarter in a row, Cooperman’s top holding was private education loans company SLM Corp (NASDAQ:SLM). Student lenders don’t have the best position in consumer sentiment at the moment as student debt continues to increase, and the federal government has increasingly taken shots at for-profit education companies. Yet SLM Corp (NASDAQ:SLM) is up 17% so far in 2012 despite a small earnings miss in its last quarter, and it trades at only seven times forward earnings estimates. We think this is a risky pick, and it says something about the stock that Cooperman is mostly sticking with it even as it has risen this year.

Oil & gas. As with student loans, Cooperman continues to bet heavily on oil and gas. Three of his top five positions are energy related: Kinder Morgan (NYSE:KMI) had purchased Omega holding El Paso during the second quarter in a combined cash and stock deal, explaining the rise in shares of stock in that company. Omega sold a small portion of its shares of other energy companies Atlas Pipeline Partners (NYSE:APL) and Linn Energy (NASDAQ:LINE), and its sales of Transocean were enough that that position dropped out of its top ten holdings, but the fund remains committed to oil and gas. We think energy is a good place to be as drilling for oil and gas in the U.S. continues its boom- though for many of these stocks an investor does have to worry about a macro slowdown in the U.S. or worldwide that would hit oil and natural gas prices.

AIG. This one was a big move as Omega tripled its position in American International Group (NYSE:AIG). The insurer is a value stock on a purely quantitative basis- trailing P/E of 3, forward P/E of 10, five-year PEG of 0.4, trading at about half the book value of its equity- but poor sentiment has tended to keep investors away. As with SLM, this is a cheap stock but one which carries a number of risks, though Cooperman’s commitment here could serve as a seal of approval for a retail investor to get into the stock.

Telecommunications.  The fund nearly doubled its stake in Qualcomm Inc (NASDAQ:QCOM), a provider of communications equipment, and increased its position in phone company Sprint Nextel (NYSE:S) by about a third. Sprint’s business has been struggling recently, and it is expected to be unprofitable this year and next year, but its stock has more than doubled this year- most of that gain coming since the beginning of June- as investors perceive the possibility of a turnaround. Qualcomm Inc (NADAQ:QCOM) is a bit more stable: the business has been growing its revenue and earnings and trades at 18 times trailing earnings. Based on analyst estimates, it trades at 15 times forward earnings. Qualcomm Inc (NASDAQ:QCOM) is one of the 10 most popular technology stocks among hedge funds.

Cooperman’s primary macro stance in Omega’s portfolio continues to be oil and gas, which indicates bullishness at least on the U.S. if not also on the global economy. Aside from that, the fund appears to be taking its largest positions on cheap stocks with red flags- SLM and AIG.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!