Billionaire Leon Cooperman’s Cheap Stock Picks: AIG, Halliburton, and More

Cooperman and his team also liked Halliburton Company (NYSE:HAL), buying shares of the oilfield services company during the quarter. Despite a frenzy of oil and gas activity, particularly in the onshore U.S., earnings were actually down last quarter versus a year earlier. Halliburton trades at 11 times earnings, whether we consider trailing results or analyst consensus for next year, and the sell-side’s growth estimates imply a five-year PEG ratio of 0.6. We could consider it a value stock, though it might be worth paying a premium for peer Schlumberger. Halliburton was one of the most popular energy stocks among hedge funds.

$55 billion market cap health insurer UnitedHealth Group Inc. (NYSE:UNH) is another cheap stock at 10 times trailing earnings, even though revenue and earnings rose nicely in the third quarter compared to the same period in 2011. We think that the market may be worried about how federal health care policy will affect the insurers, as the industry in general trades at low multiples. Third Point, managed by billionaire Dan Loeb, owned 2 million shares at the end of September (find more stock picks from Dan Loeb). We do have concerns about the business but given the price we would at least consider buying somewhere in the insurance industry.

Omega owned 2.9 million shares of Energy XXI Limited (NASDAQ:EXXI), which is an oil and gas exploration and production company. Earnings plunged in the most recent fiscal quarter compared to the same period in the previous year, and the stock currently posts a trailing P/E of 9. Elliott Management reported a position of 3 million shares at the end of the quarter; Elliott was founded in 1977 by now-billionaire Paul Singer (see more stocks Elliott owned). We think that there are more stable oil and gas companies trading at similar multiples, and large oil majors like Exxon Mobil and BP might be better buys.