Billionaire Leon Cooperman‘s Omega Advisors recently filed its 13F form for the first quarter. Of the total $11.2 billion worth of assets that the fund has under management, it holds around $6.27 billion in the equity portfolio as of the end of March. The fund’s top picks included Actavis plc (NYSE:ACT), Citigroup Inc(NYSE:C), American International Group Inc (NYSE:AIG), and Sirius XM Holdings Inc. (NASDAQ:SIRI).
Cooperman founded his New York City-based hedge fund in 1991 after serving in Goldman Sachs for 25 years. He was CEO at Goldman Sachs Asset Management. The long/short equity fund invests for a long-term horizon, with an average holding period amounting to 12 months. Omega uses extensive fundamental research to pluck out the companies with best future prospects and mainly focuses on large and mid-cap North-American securities.
At Insider Monkey we follow hedge funds because our research has shown that their stock picks historically managed to generate alpha even though the filings are 45 days delayed. We used a 60-day delay in our back tests to be on the safe side. Our research have shown that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012. These stocks returned 132% over the last 2.5 years, outperforming the S&P 500 ETF by nearly 80 percentage points (see more details here).
Coming back to Omega’s top picks, Actavis plc (NYSE:ACT) held the top spot despite the stake being trimmed by 1% during the first quarter to 933,475 shares valued at $277.82 million. The holding represents 4.43% of the fund’s equity portfolio. Actavis plc (NYSE:ACT)’s stock has gained about 15.22% year-to-date. The company delivered impressive results for the first quarter with an EPS of $4.30 beating estimates by $0.36 and revenues of $4.2 billion coming in $170 million ahead of expectations. Actavis plc (NYSE:ACT) completed its acquisition of Allergan in March, which was the largest deal in the healthcare sector over the last 10 years. The company also received approval for four new brand products and launched 20 new ones during the quarter. Two other prominent stockholders of Actavis plc (NYSE:ACT) include Andreas Halvorsen‘s Viking Global and Dan Loeb’s Third Point.
Second in line is Citigroup Inc (NYSE:C), in which the investor inched up its stake by 1% to 4.30 million shares valued at $221.56 million. Citigroup Inc (NYSE:C)’s stock is up by 17.7% over the last year. This compares extremely favorably with the average increase of 3.56% for the global bank industry during the same period. The $165.66 billion financial services holding company has passed this year’s stress test. Citigroup’s CEO, Michael Corbat delayed his retirement and spent $180 million to improve the bank’s processes. This has allowed the bank to increase its quarterly dividend by 400% to $0.05 and it plans to buy back $7.8 billion worth of stock over the next five quarters. On a less optimistic note, Citigroup Inc (NYSE:C) has confirmed in its quarterly report that the bank could plead guilty to the antitrust charge as part of forex rigging charges, and pay the consequent fine. According to our database, Boykin Curry‘s Eagle Capital Management is the largest stockholder of the company.
American International Group Inc (NYSE:AIG)’s stake was slashed by 3% during the quarter to 3.87 million shares valued at $212.29 million. Omega has continuously held a position in American International Group Inc (NYSE:AIG) since the first quarter of 2007. The $78.48 billion insurance company’s stock has appreciated by a modest 5.09% so far this year. Last year, during the SALT conference Cooperman said: “We think AIG over the next three years gets to a 10 percent ROE, and that gets you into the mid-$60s stock price.” American International Group Inc (NYSE:AIG) is proceeding with its integration plans in Japan, which involve the merger of its subsidiaries AIU Insurance Company, Ltd and The Fuji Fire and Marine Insurance. However, the date of completion has been moved to the second half of 2016 from the second half of this year. Among other notable shareholders of American International Group Inc (NYSE:AIG) is Bruce Berkowitz‘s Fairholme Capital Management.
After a 3% decrease of the stake in Sirius XM Holdings Inc. (NASDAQ:SIRI), Omega owns 55.90 million shares valued at $213.52 million. Sirius XM Holdings Inc. (NASDAQ:SIRI)’s stock is up by 11.71% so far this year. Despite double digit growth in net income during the first quarter as compared to last year, Sirius XM Holdings Inc. (NASDAQ:SIRI) missed the analyst estimates for both the top and bottom line. Peter Adam Hochfelder’s Brahman Capital is the largest stockholder of Sirius XM Holdings Inc. (NASDAQ:SIRI), according to our database.
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