Billionaire Leon Cooperman’s Small Cap Picks Include SandRidge Energy Inc. (SD)

Page 1 of 2

Our research shows that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). We think that this is because large institutional investors such as mutual funds (as well as the financial media) pay less attention to small cap stocks, and so they are more likely to be either undervalued or overvalued in the market. We can also make use of this finding to some degree by reviewing small cap stocks (which we define as those with market caps between $1 billion and $5 billion) from top managers so that investors can do further research on any interesting names. Read on for our quick take on the five largest small cap holdings in billionaire Leon Cooperman’s Omega Advisors’ most recent 13F filing or see the full list of stock picks from the end of March.

Cooperman and his team reported a position of 5.1 million shares in Atlas Pipeline Partners, L.P. (NYSE:APL), which gathers, processes, and transports natural gas. The development of new shale plays has led to a rapid increase in natural gas production in the onshore U.S., increasing demand for midstream infrastructure. At current prices and dividend levels, Atlas Pipeline pays a dividend yield of just over 6% but we would note that the stock is highly exposed to the broader economy with a beta of 1.9- making it a poor choice for more defensive minded investors- and that quarterly payments have still not recovered to pre-crisis levels.

OMEGA ADVISORSThe manager of Atlas Pipeline’s general partner, Atlas Energy LP (NYSE:ATLS), was another of Omega’s small cap picks. Atlas Energy also acts as a producer of oil and gas, with interests in over 10,000 wells in the onshore U.S. with a focus on Appalachian shale plays such as the Marcellus and Utica. It’s even more dependent on macro conditions, with a beta of 2.9. Brian Jackelow’s SAB Capital Management initiated a position of just over 1 million shares in Atlas Energy during the first quarter of 2013 (check out more stocks SAB was buying).

The fund disclosed ownership of nearly 49 million shares of $3.1 billion market cap real estate investment trust Chimera Investment Corporation (NYSE:CIM). Real estate investment trusts have been battered over the last month, with Chimera down close to 10% over that period, as interest rates have risen; because REITs receive favorable tax treatment conditional on distributing a large share of taxable income to shareholders, their yields are often high. Chimera pays investors an annual yield of over 10% at current prices, though as an investor in mortgage-backed securities its cash flow bear quite a bit of risk.

Page 1 of 2
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 Click to see monthly returns in table format!

Lists

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

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!