Billionaire Leon Cooperman’s Long Term Stock Picks Include Transocean LTD (RIG)

The fund disclosed ownership of 5.1 million shares of Atlas Pipeline Partners, L.P. (NYSE:APL), which gathers and processes natural gas. U.S. natural gas infrastructure will have to be built out in the coming years due to high production in onshore shale plays. The company has generally been increasing its dividend over the past few years, though quarterly payments are still short of where they were in 2008 when net gas prices were much higher (the stock now yields about 6%). Renaissance Technologies, whose founder Jim Simons is now a billionaire, initiated a small position in Atlas Pipeline Partners, L.P. (NYSE:APL) between January and March (find Renaissance’s favorite stocks).

Atlas Energy LP (NYSE:ATLS) was another of Cooperman’s long term stock picks. The company maintains ownership stakes in natural gas and oil producing wells in the United States as well as gathering and processing facilities. With a beta of 2.9, Atlas Energy LP (NYSE:ATLS) tends to be highly sensitive to the movements of major market indices. We’d note that recent company reports have shown low profitability, and so we’d be concerned about how its business is going. Cobalt Capital Management, which is managed by Leon Cooperman’s son Wayne, owned about 680,000 shares of Atlas Energy LP (NYSE:ATLS) at the beginning of April.

According to the 13F, Omega had 3.2 million shares of offshore driller Transocean LTD (NYSE:RIG) in its portfolio at the end of Q1 2013. Billionaire Carl Icahn (research more stocks in Icahn’s portfolio) has taken an activist stake in Transocean LTD (NYSE:RIG), believing that the company is not returning enough cash to shareholders (though the current dividend yield is quite high, at 4.5%). Analysts are bullish on offshore drilling, and therefore expect high future earnings growth for Transocean LTD (NYSE:RIG): their forecasts imply a forward earnings multiple of only 9 and a five-year PEG ratio of 0.4. We wouldn’t take that at face value but would be interested in further researching the company.

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