Billionaire Leon Cooperman’s Latest Stock Picks Include SandRidge

Phones and radio. Cooperman and his team increased their holdings of both Sprint Nextel Corporation (NYSE:S) and Sirius XM Radio Inc (NASDAQ:SIRI) by at least 10%; Sprint was the fund’s largest position by market value at the beginning of 2013. While Sprint did post losses for 2012 and is expected to do the same this year Wall Street analysts do expect these losses to be smaller and Sprint is up about 160% in the last year off of market optimism. We would note that revenue growth has been low and careful analysis would be required if an investor was interested in following this move. Sirius is expected to earn 10 cents per share this year, resulting in a high current-year P/E. Revenue was up 14% last quarter compared to the fourth quarter of 2012. Sirius’s stock has also been a strong performer over the last year, rising 49%.

Sprint and Sirius XM seem pricy in terms of valuation, and may be a bit too speculative for many investors though certainly Omega’s bullishness is noted. We’ve mentioned that we would consider Apple cheap at its current price though certainly Cooperman and his team were correct to sell when they did. Sandridge- also a stock we’d feel less than comfortable buying due to poor earnings- is an interesting pick; certainly we doubt that the fund has bought these shares without having some view on the governance situation. Chesapeake has rallied strongly since its CEO’s removal and Omega may believe that the market would react similarly to the same occurring at Sandridge.

Disclosure: I own no shares of any stocks mentioned in this article.