In this article, we reviewed billionaire Leon Cooperman’s portfolio management strategy and how billionaire Leon Cooperman is making profits by investing in the finance sector in the current situation. You can skip our detailed analysis of Cooperman’s history, investment philosophy, and hedge fund performance and jump directly to 5 Best Finance Stocks to Buy According to Billionaire Leon Cooperman.
Billionaire Leon Cooperman, the chairman of Omega Advisors, is regarded as one of Wall Street’s greatest investors. After managing investors’ money for 27 years, he closed Omega Advisors for outside investors in 2018 and converted it into a family office. Currently, Omega Advisors manages assets totaling nearly $4.3 billion.
A South Bronx plumber’s son, Cooperman earned an MBA from Columbia University. He was a key figure in the creation of the Goldman Sachs Asset Management unit. In 1991, Cooperman left Goldman to start his own fund.
This year, his bets on insurance, mortgage, and consumer loan companies have achieved substantial returns. The finance sector accounted for about 40% of Cooperman’s second quarter portfolio.
First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD), Barings BDC, Inc. (NYSE:BBDC), Ocwen Financial Corporation (NYSE:OCN), Ellington Financial Inc. (NYSE:EFC), and Citigroup Inc (NYSE:C) are among the 10 best finance stocks to buy according to billionaire Cooperman.
Why should we pay attention to billionaire Leon Cooperman’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s start digging into the 10 best finance stocks to buy according to Leon Cooperman. We made use of the Omega Advisors’ second quarter 13F portfolio for this analysis.
Leon Cooperman of Omega Advisors
Best Finance Stocks to Buy According to Billionaire Leon Cooperman
10. First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD)
Omega Advisors’ Stake Value: $9.6 million
Percentage of Omega Advisors’ 13F Portfolio: 0.54%
Number of Hedge Fund Holders: 5
Cooperman has been a shareholder of First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) since 2010. After years of decline, the business development company’s shares have surged sharply this year.
Hedge fund interest in First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) shares increased during the second quarter. This is usually a positive indicator. The number of hedge fund positions increased to 5 from 2 in the previous quarter. Two Sigma Advisors, D E Shaw, and Arrowstreet Capital were among the leading shareholders in the company.
9. Barings BDC, Inc. (NYSE:BBDC)
Omega Advisors’ Stake Value: $11.94 million
Percentage of Omega Advisors’ 13F Portfolio: 0.67%
Number of Hedge Fund Holders: 15
Billionaire Leon Cooperman appears bullish over the future fundamentals of Barings BDC, Inc. (NYSE:BBDC).
Money managers were turning bullish on the stock during the second quarter. In addition to an increase in long hedge fund bets, elite funds added to their existing stakes. For instance, James Morrow’s Callodine Capital Management raised its exiting position in Barings BDC, Inc. (NYSE:BBDC) by 48% to 2.05% of the overall portfolio.
8. Ocwen Financial Corporation (NYSE:OCN)
Omega Advisors’ Stake Value: $14 million
Percentage of Omega Advisors’ 13F Portfolio: 0.79%
Number of Hedge Fund Holders: 10
A small-cap mortgage loan company, Ocwen Financial Corporation (NYSE:OCN) is also a member of billionaire Leon Cooperman’s portfolio since 2017. The mortgage loan company has a market cap of just over $2.6 million. Although Ocwen Financial Corporation (NYSE:OCN) posted a net loss of $10.3 million for the second quarter, the firm’s revenue diversification, cost reduction, and operational excellence strategies would help in improving its financial numbers.
7. Ellington Financial Inc. (NYSE:EFC)
Omega Advisors’ Stake Value: $14.5 million
Percentage of Omega Advisors’ 13F Portfolio: 0.82%
Number of Hedge Fund Holders: 7
Ellington Financial Inc. (NYSE:EFC) is one of the long-running stock holdings of billionaire Cooperman’s portfolio. A key benefit of investing in Ellington Financial Inc. (NYSE:EFC) is its high dividend yield of 9.65% along with a significant stock price upside potential. Ellington Financial Inc. (NYSE:EFC) is engaged in acquiring and managing consumer, mortgage, corporate-related, and other financial assets in the United States.
As of the end of the second quarter of 2021, Mike Vranos’ Ellington was the leading stakeholder in Ellington Financial Inc. (NYSE:EFC) while Ken Griffin’s Citadel Investment Group increased its existing position by 106% in the company.
6. Citigroup Inc. (NYSE:C)
Omega Advisors Stake Value: $26.8 million
Percentage of Omega Advisors’ 13F Portfolio: 1.51%
Number of Hedge Fund Holders: 87
Citigroup Inc. (NYSE:C), an American multinational investment bank and financial services corporation, is a member of billionaire Leon Cooperman’s portfolio since 2017. Share of Citigroup Inc. (NYSE:C) bounced back strongly this year after experiencing a downturn in the last year. In addition to share price gains, Citigroup Inc. (NYSE:C) offers a healthy dividend yield of 2.87% at present.
Citigroup Inc. (NYSE:C) has experienced a decrease in hedge fund sentiment lately. Richard Oldfield’s investment firm Oldfield Partners, which was the leading stakeholder in the company, also slashed its stake by 4% to capitalize on recent share price gains. Citigroup Inc. (NYSE:C) was in 87 hedge funds’ portfolios at the end of June.
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Disclosure: None. 10 Best Finance Stocks to Buy According to Billionaire Leon Cooperman is originally published on Insider Monkey.
