Billionaire Leon Cooperman’s High Upside Potential Picks Include Express Scripts

The 13F disclosed ownership of 3.9 million shares of NYSE Euronext (NYSE:NYX) following a large increase in Omega’s holdings during the fourth quarter of 2012. Last quarter NYSE Euronext’s revenue fell 14% compared to the fourth quarter of 2011, contributing to a 75% drop in net income. As a result it is more of a company whose valuation is dependent on a recovery in business conditions; the trailing earnings multiple is 27. We would need to see better numbers from NYSE Euronext before considering it as a growth stock, and would avoid it for now.

Cooperman and his team sold some of their holdings of Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), a $1.7 billion market cap mortgage investment management services company. Altisource has high customer concentration, with Ocwen Financial making up a large share of revenues, but Ocwen is growing its business rapidly including by acquisition. Currently the trailing P/E is 16, and when we consider growth estimates the market is clearly being more pessimistic than the analyst consensus.

We don’t think that NYSE Euronext is an attractive value stock right now. While Transocean is cheap in terms of forward earnings estimates, and might be worth a look, we are a bit skeptical as to how supportive oil prices will be and would need to game out how well the company might do if prices fell. Altisource, Express Scripts, and Sallie Mae do have risks but in terms of their current business they seem priced cheaply and certainly the former two companies have opportunities for potential growth making them quite interesting from our point of view.

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