In this article, we discuss 10 favorite stocks of billionaire Leon Cooperman.
Leon Cooperman is perhaps one of the most well known financiers on Wall Street. In 1991, the billionaire founded Omega Advisors, a New York-based hedge fund, and he served as the chief executive officer and chairman of the fund. Leon Cooperman received his MBA from Columbia Business School, and he is also a chartered financial analyst. He worked at Goldman Sachs for 22 years and then he left to establish his own hedge fund. He converted Omega Advisors into a family office in 2016.
“The US Could Enter Recession in 2023”
On April 6, Leon Cooperman shared his market view and stated that consistently increasing oil prices could result in a recession in the United States in 2023. In addition to that, he believes that the aggressive rate hikes by the Fed could also tamper with economic growth and push the economy into a recession.
With the volatile macro conditions, Cooperman said that his economic forecast is as good as any circulating the markets and anything could happen in the future. However, the historically poor fiscal and monetary policies by the US government will have consequences that the country will have to face in the near future.
The Omega CEO disclosed that 20% of his portfolio is concentrated in the energy sector, and he is 68% long right now, favoring long positions over short. He considers energy stocks a cheaper alternative to commodities, and he has made a 6% year-to-date return with his strategies. The billionaire still prefers value stocks in this market.
Some of the most notable stocks in the fourth quarter portfolio of billionaire Leon Cooperman’s Omega Advisors include Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), among others discussed in detail below.
Leon Cooperman of Omega Advisors
Our Methodology
We used the Q4 portfolio of Leon Cooperman’s Omega Advisors for this analysis, selecting the billionaire’s top 10 holdings.
Favorite Stocks of Billionaire Leon Cooperman
10. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Omega Advisors’ Stake Value: $69,385,000
Percentage of Omega Advisors’ 13F Portfolio: 3.85%
Number of Hedge Fund Holders: 61
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) was incorporated in 2017 and is headquartered in Phoenix, Arizona. The company is a provider of portable storage solutions in the United States, Canada, Mexico, and the United Kingdom. Leon Cooperman owns approximately 1.7 million shares of WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), worth $69.3 million, representing 3.85% of the total 13F holdings.
On February 24, WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) posted its fourth quarter financial results. The company announced earnings per share of $0.35, beating analysts’ consensus estimates by $0.06. The revenue amounted to approximately $518 million, up 18.32% year-over-year, outperforming market consensus by $24.19 million.
Deutsche Bank analyst Faiza Alwy initiated coverage of WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) on March 29 with a Buy rating and a $49 price target. The analyst remains positive on the company, citing its “clear path” to growth acceleration and free cash flows.
According to the Q4 database of elite hedge funds maintained by Insider Monkey, 61 funds were bullish on WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), compared to 56 funds in the earlier quarter. The total stakes held in Q4 amounted to $1.95 billion. Macquarie Group Ltd is an institutional investor that owns roughly 3.5 million shares of WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), worth $142.70 million.
In addition to Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is one of the favorite stocks of billionaire Leon Cooperman.
Here is what ClearBridge Investments SMID Cap Growth Strategy has to say about WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) in its Q4 2021 investor letter:
“We added six new positions in the fourth quarter, the largest being WillScot Mobile Mini in the industrials sector. WillScot is the leading manufacturer in the modular office and storage end markets. The company has a multitude of idiosyncratic growth drivers that should support a doubling of free cash flow per share over the next four to five years.”
9. Microsoft Corporation (NASDAQ:MSFT)
Omega Advisors’ Stake Value: $82,636,000
Percentage of Omega Advisors’ 13F Portfolio: 4.15%
Number of Hedge Fund Holders: 262
Billionaire Leon Cooperman, as per the securities filings for Q4 2021, owns 245,705 shares of Microsoft Corporation (NASDAQ:MSFT), worth $82.6 million, accounting for 4.15% of his total portfolio holdings. Microsoft Corporation (NASDAQ:MSFT)’s $69 billion impending acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) is currently under review by the US Securities and Exchange Commision on insider trading allegations.
On March 9, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.62 per share, in line with previous. The dividend is payable on June 9, to shareholders of the company at the close of business on May 19. Microsoft Corporation (NASDAQ:MSFT) delivers a dividend yield of 0.88% as of April 18.
Morgan Stanley analyst Keith Weiss on April 12 maintained an Overweight rating and a $372 price target on Microsoft Corporation (NASDAQ:MSFT), calling it one of his preferred names. The analyst noted in a preview of the company’s fiscal Q3 report that Microsoft Corporation (NASDAQ:MSFT) has “strong positioning across key growth and defensible spending categories”, which he thinks should assist with offsetting the effects of the volatile macro environment.
Among the hedge funds tracked by Insider Monkey at the end of December 2021, 262 funds held long positions in Microsoft Corporation (NASDAQ:MSFT), compared to 250 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 26.8 million shares worth over $9 billion.
Here is what Baron Opportunity Fund has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter, following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft’s results continued to be strong across the board, with total revenue growing 20% in constant currency, beating Street estimates by 3%; an acceleration in Commercial Cloud revenue to 34% constant-currency growth; operating margins expanding to just under 45%; earnings growth of 23%; and free cash flow growth of 30%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by total addressable market expansion and continued market share gains across its disruptive cloud product portfolio.”
8. Ashland Global Holdings Inc. (NYSE:ASH)
Omega Advisors’ Stake Value: $93,876,000
Percentage of Omega Advisors’ 13F Portfolio: 4.71%
Number of Hedge Fund Holders: 25
Ashland Global Holdings Inc. (NYSE:ASH) is a Delaware-based company that operates through the Life Sciences, Personal Care & Household, Specialty Additives, and Intermediates and Solvents segments. Omega Advisors owns 871,965 shares of Ashland Global Holdings Inc. (NYSE:ASH) as of Q4 2021, worth $93.8 million, representing 4.71% of the total 13F holdings.
Ashland Global Holdings Inc. (NYSE:ASH) announced preliminary Q2 adjusted earnings of $1.50 per diluted share and a revenue of $604 million, up approximately 19% year-over-year, ahead of analysts’ consensus estimates of $1.14 and $574.94 million, respectively.
On April 13, Deutsche Bank analyst David Begleiter raised the firm’s price target on the stock to $120 from $115 and kept a Buy rating on the shares. The better than expected preannounced Q1 results were driven by strong demand and pricing, which easily compensates for the increased raw material, freight, and energy costs, the analyst told investors in a research note.
According to Insider Monkey’s Q4 data, 25 hedge funds were bullish on Ashland Global Holdings Inc. (NYSE:ASH), with combined stakes of $485.3 million, compared to 26 funds in the preceding quarter, holding stakes in Ashland Global Holdings Inc. (NYSE:ASH) worth $800.70 million. Ricky Sandler’s Eminence Capital is the biggest position holder in the company, with more than 4 million shares valued at $434.4 million.
Here is what Diamond Hill Small Cap Fund has to say about Ashland Global Holdings Inc. (NYSE:ASH) in its Q4 2021 investor letter:
“Other top contributors included specialty chemicals company Ashland Global. Investors were cheered when Ashland Global’s management projected a stronger than expected outlook for margins and top-line organic growth.”
7. MP Materials Corp. (NYSE:MP)
Omega Advisors’ Stake Value: $97,194,000
Percentage of Omega Advisors’ 13F Portfolio: 4.88%
Number of Hedge Fund Holders: 24
MP Materials Corp. (NYSE:MP) is headquartered in Las Vegas, Nevada, operating rare earth mining and processing plants. The company extracts and distributes cerium, lanthanum, neodymium, praseodymium, and samarium.
Securities filings for the fourth quarter of 2021 reveal that Leon Cooperman’s Omega Advisors held 2.13 million shares of MP Materials Corp. (NYSE:MP), worth over $97 million, representing 4.88% of the total 13F portfolio. The hedge fund slashed its stake in the company by 11% in Q4.
On March 8, MP Materials Corp. (NYSE:MP)’s director Randall Weisenburger disclosed the purchase of 30,000 units of common stock, priced at $38.40 each. The transaction was worth approximately $1.2 million, and shares rose 11.4% upon disclosure.
MP Materials Corp. (NYSE:MP) reported earnings for the fourth quarter of 2021 on February 24, posting an EPS of $0.31 and a revenue of $99.11 million, above market consensus by $0.07 and $639,900 respectively. Revenue for Q4 climbed about 135% on a year-over-year basis.
Benchmark analyst Subash Chandra upgraded MP Materials Corp. (NYSE:MP) on February 9 to Buy from Hold with a $47 price target. The analyst raised his EPS and EBITDA estimates for Q4 and 2022, driven by the increase in light rare-earth prices since the third quarter.
According to Insider Monkey’s fourth quarter database, 24 hedge funds placed long calls on MP Materials Corp. (NYSE:MP), compared to 20 funds in the earlier quarter. The hedge funds in Q4 collectively held stakes in MP Materials Corp. (NYSE:MP) worth more than $3 billion.
6. Cigna Corporation (NYSE:CI)
Omega Advisors’ Stake Value: $103,334,000
Percentage of Omega Advisors’ 13F Portfolio: 5.19%
Number of Hedge Fund Holders: 53
Cigna Corporation (NYSE:CI) is a Connecticut-based multinational insurance company that offers healthcare services, health insurance, life insurance, and pharmacy benefits. Leon Cooperman, as of Q4 2021, owns 450,000 Cigna Corporation (NYSE:CI) shares, worth $103.3 million, representing 5.19% of the total 13F holdings.
In 2021, Cigna Corporation (NYSE:CI)’s full-year revenue stood at $174.2 billion, compared to $160.5 billion in the prior year. However, the net income in 2021 came in at $5.3 billion, versus the 2020 income of $8.4 billion.
Cigna Corporation (NYSE:CI) announced a sizable extension to its share repurchase plan on February 28 of $6 billion, bringing the total capacity to $10 billion. The company’s equity is attractive, which is why it will deploy capital worth over $7 billion for share repurchases in 2022. Cigna Corporation (NYSE:CI) also plans to invest in innovation.
Truist analyst David MacDonald raised the price target on Cigna Corporation (NYSE:CI) to $290 from $275 and reiterated a Buy rating on the shares on April 7. The analyst stated that he is positive on the underlying demand drivers and strong tailwinds for the insurance industry, with fading COVID-19 challenges alleviating labor supply constraints and favorably impacting the year. The analyst added that industry cash flows remain robust and he sees potentially accelerating mergers and acquisitions activity in the space.
Among the hedge funds tracked by Insider Monkey, 53 funds were bullish on Cigna Corporation (NYSE:CI) at the end of the fourth quarter of 2021, with collective stakes amounting to $1.92 billion. John Allison’s Unio Capital held the biggest position in the company, worth $1.3 billion.
Just like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), elite hedge funds are piling into Cigna Corporation (NYSE:CI).
Here is what Davis Opportunity Fund has to say about Cigna Corporation (NYSE:CI) in its Q4 2021 investor letter:
“Healthcare is included in the portfolio both for company-specific reasons, as well as big picture trends. At the company level, we hold select companies in pharmaceuticals, healthcare services and health insurance at attractive valuations. This is at a time when the average age of the U.S. population is fast approaching 40, older than Asia-Pacific and a little younger than the aged populations of Europe and Japan. The number of seniors in the U.S.—i.e., 65 years or older— now surpasses 54 million, or about 15% of the population. Seniors, on average, take a much greater number of medications and account for a large and disproportionate share of healthcare spending, and we expect that trend to continue due to both raw demographics and a proliferation in the number of available treatments and services available now, the latter being driven by innovation and investment in the healthcare industry. Representative holdings in the Fund include Cigna, United Health Group, Viatris and Quest Diagnostics.”
5. Fiserv, Inc. (NASDAQ:FISV)
Omega Advisors’ Stake Value: $106,966,000
Percentage of Omega Advisors’ 13F Portfolio: 5.37%
Number of Hedge Fund Holders: 61
Fiserv, Inc. (NASDAQ:FISV) was incorporated in 1984 and is headquartered in Brookfield, Wisconsin. The company offers payment technology and financial services to customers worldwide. On April 12, Cowen analyst George Mihalos downgraded Fiserv, Inc. (NASDAQ:FISV) to Market Perform from Outperform with a price target of $126, down from $144.
Leon Cooperman’s Omega Advisors held a stake in Fiserv, Inc. (NASDAQ:FISV) worth approximately $107 million in the December quarter, representing 5.37% of the total 13F securities.
In 2021, Fiserv, Inc. (NASDAQ:FISV) reported a full-year revenue of $16.2 billion, compared to a revenue of $14.8 billion in the previous year. Net income in 2021 grew 39.25% year-over-year to $1.3 billion, versus $958 million in 2020.
According to Insider Monkey’s Q4 data, 61 hedge funds were bullish on Fiserv, Inc. (NASDAQ:FISV), compared to 65 funds in the previous quarter. The collective stakes owned by the hedge funds in the fourth quarter amounted to $3.90 billion. Harris Associates is the biggest position holder in Fiserv, Inc. (NASDAQ:FISV), with 23.3 million shares worth $2.4 billion.
Here is what ClearBridge Investments Value Equity Strategy has to say about Fiserv, Inc. (NASDAQ:FISV) in its Q4 2021 investor letter:
“While the threat of disruption risk to these established payment companies should not be taken lightly, it is important to note that many of these emerging disruptors are small relative to the massive global payments network and heavily reliant on the very payment infrastructure they are trying to disrupt. This led us to initiate a position in Fiserv, whose stock dropped to a level that embedded projections for negative long-term growth despite no current evidence of disruption. We think Fiserv will continue to grow despite perceived disruption risks given its scale and efficiency. Fiserv also owns cloud-based payments hardware and software system Clover, which is both bigger and faster growing than Square; this provides an additional degree of protection against further disruption risk.”
4. Devon Energy Corporation (NYSE:DVN)
Omega Advisors’ Stake Value: $119,881,000
Percentage of Omega Advisors’ 13F Portfolio: 6.02%
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based energy company that produces and distributes oil, natural gas, and natural gas liquids in the United States. Leon Cooperman owns over 1 million shares of Devon Energy Corporation (NYSE:DVN) as per the 13F filings from Q4 2021, worth $119.8 million, representing 6.02% of the total securities.
Devon Energy Corporation (NYSE:DVN)’s year-end revenue for 2021 came in at $13.1 billion, compared to $4.5 billion in the preceding year. The 2021 net income of $2.8 billion rebounded sharply from the $2.6 billion net loss in the last year.
On February 15, Devon Energy Corporation (NYSE:DVN) declared a $1.00 per share quarterly dividend. The dividend was distributed on March 31, to shareholders of the company as of March 14. Devon Energy Corporation (NYSE:DVN)’s dividend yield on April 18 stood at 6.30%.
Piper Sandler analyst Mark Lear on April 7 reiterated an Overweight rating on Devon Energy Corporation (NYSE:DVN) and raised the firm’s price target on the stock to $80 from $67. With Russian oil and product exports off the market, Piper’s Energy Macro team sees the United States with suppliers who have the capacity to deliver in the long-term, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, 51 funds held long positions in Devon Energy Corporation (NYSE:DVN) at the end of December 2021, up from 48 funds in the previous quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 14.5 million shares worth close to $639 million.
Here is what GoodHaven Capital Management has to say about Devon Energy Corporation (NYSE:DVN) in their Q4 2020 investor letter:
“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”
3. Athene Holding Ltd. (NYSE:ATH)
Omega Advisors’ Stake Value: $133,328,000
Percentage of Omega Advisors’ 13F Portfolio: 6.69%
Number of Hedge Fund Holders: N/A
Athene Holding Ltd. (NYSE:ATH) is an insurance company that offers retirement savings products for individuals and institutions in the United States, Bermuda, and Canada. Leon Cooperman’s hedge fund slashed its stake in Athene Holding Ltd. (NYSE:ATH) by 8% in Q4 2021, but still held 1.60 million shares of the company, worth $133.3 million. The stock represents 6.69% of the total 13F securities.
Athene Holding Ltd. (NYSE:ATH)’s revenue for 2021 stood at $26.3 billion, up from $14.7 billion in the preceding year. The net income for 2021 came in at $3.85 billion, compared to $1.5 billion in 2020.
Among the hedge funds tracked by Insider Monkey, Matthew Halbower’s Pentwater Capital Management held the biggest stake in Athene Holding Ltd. (NYSE:ATH) at the end of December 2021, with 2.2 million shares worth $189.5 million.
2. Alphabet Inc. (NASDAQ:GOOG)
Omega Advisors’ Stake Value: $173,822,000
Percentage of Omega Advisors’ 13F Portfolio: 8.73%
Number of Hedge Fund Holders: 158
Leon Cooperman held 60,000 Alphabet Inc. (NASDAQ:GOOG) shares as per the securities filings from Q4 2021, worth $173.8 million, representing 8.73% of the total 13F portfolio. Alphabet Inc. (NASDAQ:GOOG) has featured on the billionaire’s portfolio since Q3 2015, and after disposing of the stock in Q2 2020, he purchased the shares again in the next quarter.
On March 10, Deutsche Bank analyst Ben Black initiated coverage of Alphabet Inc. (NASDAQ:GOOG) with a Buy rating and a $3,150 price target. According to the analyst, Alphabet Inc. (NASDAQ:GOOG) is a structural winner amid the growing trend of commerce and services shifting from physical storefronts to digital venues. He added that Google is at the intersection of merchants and consumers and “clearly stands to benefit” from e-commerce increasingly becoming a global retail channel.
Among the hedge funds tracked by Insider Monkey, 158 funds were long Alphabet Inc. (NASDAQ:GOOG) at the end of December 2021, compared to 156 funds in the prior quarter. Chris Hohn’s TCI Fund Management held the leading stake in the company, with shares worth $8.5 billion.
Here is what ClearBridge Investments Large Cap Value Strategy has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Additionally, we added to our position in Alphabet (NASDAQ:GOOG), whose valuation we found attractive amid the market selloff early in the quarter, particularly given its dominant position in search, its scaling opportunities in cloud services, and its relative insulation from Apple (NASDAQ:AAPL)’s privacy initiatives, which do not affect Alphabet’s core search business the way they do other large tech platforms.”
1. Mr. Cooper Group Inc. (NASDAQ:COOP)
Omega Advisors’ Stake Value: $176,801,000
Percentage of Omega Advisors’ 13F Portfolio: 8.88%
Number of Hedge Fund Holders: 38
Mr. Cooper Group Inc. (NASDAQ:COOP) was incorporated in 2015 and is based in Coppell, Texas, providing mortgage loans and financial assistance to customers. Securities filings for Q4 2021 reveal that Leon Cooperman owns 4.2 million shares of Mr. Cooper Group Inc. (NASDAQ:COOP), worth $176.8 million, representing 8.88% of the total 13 F holdings. Mr. Cooper Group Inc. (NASDAQ:COOP) is the biggest stock holding in Cooperman’s portfolio.
On February 15, Barclays analyst Mark DeVries raised the firm’s price target on the shares to $51 from $46 and maintained an Equal Weight rating on Mr. Cooper Group Inc. (NASDAQ:COOP). “Strong results” in servicing led to the Q4 earnings beat while origination results were mostly in line as the market normalizes, the analyst told investors in a research note.
According to the database of Insider Monkey, 38 hedge funds were bullish on Mr. Cooper Group Inc. (NASDAQ:COOP) at the end of the fourth quarter of 2021, up from 27 funds in the earlier quarter. Ric Dillon’s Diamond Hill Capital owned a significant stake in the company, with 2.8 million shares worth $117.3 million.
Here is what Voss Capital has to say about Mr. Cooper Group Inc. (NASDAQ:COOP) in their Q4 2020 investor letter:
“Another new long that is a value oriented special situation is Mr. Cooper (COOP). COOP is trading at 6x NTM earnings and under 1x NTM tangible book. Like MBIN, we believe the shares offer an asymmetric bet towards ongoing strength in mortgage originations and refinancing activity along with hard catalysts in the next 6-12 months that should force the stock to re-rate.
Mr. Cooper’s business segments offer natural hedges to each other. When rates rise, their mortgage servicing business does better; when rates fall (like now) their refinance and mortgage originations division does better. If there is mortgage market weakness or consumer distress and foreclosures surge, their Xome business, an online real estate marketplace known for auctions, thrives.
Our thesis for Mr. Cooper is two-fold. Firstly, we believe the stock has been “held back” because it is perceived to be a temporary, but unsustainable, beneficiary of the spike in refinancing. Not only do we believe refinancing can continue into 2021 (refi mortgage apps up 45.6% y/y for the week ended February 5th), which will increase book value, but we also believe their mortgage servicing business will pick up when refinancing and originations ebb, smoothing the earnings far more than is currently priced in.
Secondly, management has telegraphed their intent to sell Xome, either part or in whole, and have been adamant the business is worth “at least $1 billion”, a number that seems both plausible and potentially conservative in the current market environment with frothy FinTech/marketplace valuations. While Xome’s results are present on the income statement, its value is nowhere to be found on the balance sheet. With a sale in the $1 billion range Mr. Cooper will be swimming in cash like Scrooge McDuck.14 The sale will also materially increase tangible book value per share, which is how most investors value the stock. Because of tax accounting around their Net Operating Losses(NOLs), the company will have more flexibility around buybacks and special dividends starting in August. So, our thesis is that a sale of Xome will occur and the market will either push the company to at least tangible book value, or management will force the issue by aggressively buying back stock and/or issuing a large special dividend. We think the stock has >35% upside over the next six months.”
You can also take a look at 10 Biotech Stocks to Buy According to Billionaire DE Shaw and Bill Gates Portfolio: 10 Stocks to Buy and Hold for Over 5 Years.
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Disclosure: None. 10 Favorite Stocks of Billionaire Leon Cooperman is originally published on Insider Monkey.
