Billionaire Leon Cooperman’s Stock Picks

OMEGA ADVISORSA former general partner of Goldman Sachs and CEO of Goldman Sachs Asset Management (GSAM), Leon Cooperman has been the Chairman and CEO of equity hedge fund, Omega Advisors, since 1991. Cooperman joined GSAM right after graduating from Columbia University’s M.B.A. program, and stayed with the firm for twenty-five years before striking out on his own to found Omega. At 68, he remains active in the investing world, often giving interviews on Bloomberg and CNBC in addition to participating in panels like May’s SALT conference in Las Vegas. Recently, Cooperman has been reiterating his stance that US government bonds are overvalued.

Cooperman is also vocal in the political realm. Last December, he wrote an “Open Letter to the President,” that created quite a bit of controversy with some calling him a “whiny billionaire.”

An excerpt of his letter is as follows, “…what I can justifiably hold you [Obama] accountable for is your and your minions’ role in setting the tenor of the rancorous debate now roiling us that smacks of what so many have characterized as “class warfare”…the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them…” Needless to say, amidst the cresting Occupy Wall Street movement, Cooperman’s words did not go over well. He went on to point out his own humble beginnings, “Just to be clear, while I have been richly rewarded by a life of hard work (and a great deal of luck), I was not to-the-manor-born. My father was a plumber who practiced his trade in the South Bronx after he and my mother emigrated from Poland. I was the first member of my family to earn a college degree. I benefited from both a good public education system (P.S. 75, Morris High School and Hunter College, all in the Bronx) and my parents’ constant prodding. When I joined Goldman Sachs following graduation from Columbia University’s business school, I had no money in the bank, a negative net worth, a National Defense Education Act student loan to repay, and a six-month-old child to support…”

Leon Cooperman’s Top 10 Holdings:

Company Ticker Value ($000s) Activity
S L M CORP SLM 269,610 -3%
ATLAS PIPELINE PARTNERS L P APL 189,740 0%
LINN ENERGY LLC LINE 185,188 21%
APPLE INC AAPL 175,647 23%
EL PASO CORP EP 163,116 7%
TRANSOCEAN LTD RIG 154,432 11%
WELLPOINT INC WLP 154,110 118%
K K R FINANCIAL HOLDINGS L L C KFN 142,118 0%
UNITEDHEALTH GROUP INC UNH 133,873 93%
QUALCOMM INC QCOM 126,476 3%

Cooperman bought a number of financial services companies this quarter including Ocwen Financial (OCN), Citigroup (NYSE:C), Wells Fargo (WFC) and Bank of America (NYSE:BAC). Investors shy away from financial stocks because of the increased short term risks. As a result of this Citigroup currently trades at a 2012 PE ratio of 7.3, Wells Fargo has a 2012 PE ratio of 9.8, and Bank of America’s 2013 PE ratio stands at 7.6. We have indicated before that we prefer JPMorgan (JPM) to other bulge bracket banks including Goldman Sachs (GS) and Morgan (MS) due to overreaction from its ~$2 billion trading loss. JP Morgan’s 2012 PE ratio is 7.5. We think this is a great time to invest in banking stocks for the long term.

Other new buys are Google (NASDAQ:GOOG), and Sprint Nextel (S). Google is on its way of becoming the most favorite stock among hedge funds. Currently Apple (NASDAQ:AAPL) is the most popular stock among hedge funds with 134 hedge funds with bullish Apple bets. Google ranks second with a total of 115 hedge funds (see the 10 most popular stocks). We like both stocks. Apple’s 2012 PE ratio is only 12 whereas Google’s 2012 PE ratio is 15.7. These are very low PE ratios for stocks growing their earnings at a rate of 20% or more annually. Google has a wider moat than Apple and deserves a higher PE multiple. These are historically very low PE multiples for stocks growing at high rates and with large cash holdings. Apple has more than $110 billion in cash and its PE ratio excluding cash is less than 10 right now. Even utility stocks with stagnant growth rates have higher PE ratios. Google has around $50 billion in cash and its 2012 PE ratio excluding cash is only 11.5. Billionaires Stephen Mandel and Chase Coleman are among the hedge funds with large Google positions.

On the top 10 side, Cooperman continued to show a vote of confidence in managed care companies Wellpoint (WLP) and UnitedHealth (UNH). Between WLP and UNH, we would rather own UNH since we considerable growth potential in its in-house PBM, OptumRx.

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 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

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways 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

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

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!