Leon Cooperman, the manager of Omega Advisors, filed a Form 4 with the SEC, disclosing a recent purchase of 38,600 shares of Common Stock of Atlas Energy LP (NYSE:ATLS). Following this acquisition, on which he spent more than $1.52 million (or $39.44 per share), Mr. Cooperman owns about 5.79 million shares indirectly, and an extra 750,000 shares indirectly.
Leon Cooperman, son of a plumber, was born and raised in South Bronx, and worked his way into Hunter College, working as a Xerox quality control engineer in the mid-60’s. He finally got to Columbia Business School for an MBA and, the day after he graduated, Goldman Sachs snapped him up. He started as a researcher and made his way up general partner and chairman and CEO of Goldman Sachs Asset Management. He retired at the end of 1991, after 25 years of service, to found Omega Advisors, a New York City-based hedge fund with approximately $3.4 billion in Assets Under Management.
Atlas Energy LP (NYSE:ATLS) is a $1.99 billion market cap provider of natural gas gathering services in the Anadarko, Arkoma and Permian Basins and the Golden Trend in the southwestern and mid-continent United States and the Appalachian Basin in the eastern United States. According to the latest Form 4, Leon Cooperman owns a total of 6.54 million shares of the company’s Common Stock, worth almost ¼ of a billion dollars at current stock prices. This stake accounts for approximately 12.7% of the company’s shares outstanding, based on 51.46 million Units outstanding as of March 14, 2014).
Mr. Cooperman’s purchase of 38,600 Common Units took place on the same date as Atlas Resource Partners, L.P. (NYSE:ARP) announced that is Board of Directors approved quarterly cash distribution for the third quarter of 2014 of $0.64 per common limited partner unit, payable Friday, November 14, 2014 to holders of record as of Monday, November 10, 2014. According to a PR Newswire, the Partnership is expecting to have distributable cash flow coverage for the distribution of approximately 1.2x for the third quarter of 2014. But, why is Atlas Resource Partners, L.P. (NYSE:ARP) important here? Well, Atlas Energy owns and operates the general partner of its midstream oil and gas subsidiary, Atlas Resource Partners, L.P. (NYSE:ARP), through all of the general partner interest, all the incentive distribution rights and an approximate 6% limited partner interest.
A few months ago, Mr. Cooperman had recommended Atlas Energy LP (NYSE:ATLS) at the Delivering Alpha Conference. The basic factor behind this recommendation was the stock price, which stood at a 25% discount to its peers, at the time. Cooperman also said that he expected distribution to grow at a 24% annual rate, thru 2016. Additional growth opportunities derive from the fact that Atlas Energy LP (NYSE:ATLS) is a general partner of a Pipeline MLP and a Production MLP. Based on a net asset calculation, the investment guru believes that Atlas Energy LP (NYSE:ATLS) should be worth about $59.00 per share –up from the current $37.89.
Other major institutional investors betting on Atlas Energy LP (NYSE:ATLS) are Remy Trafelet’s Trafelet Capital, and Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management. These funds last disclosed (by the end of the second quarter) ownership of 541,433 shares and 350,556 shares, respectively.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
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