Billionaire Leon Cooperman’s Small Cap Picks Include SandRidge Energy Inc. (SD)

Another high yield stock that Cooperman liked was KKR Financial Holdings LLC (NYSE:KFN), though as with Chimera the yield (of nearly 8%) should be balanced against the riskiness of KKR Financial’s activities. Specifically, it often invests in mezzanine loans and other high yield debt. For what it is worth, the market capitalization of $2.2 billion places the stock’s valuation at 6 times its trailing earnings. Cobalt Capital Management, run by Leon’s son Wayne Cooperman, had 3.2 million shares of KKR Financial in its portfolio according to that fund’s own 13F.

Omega slightly increased its stake in natural gas producer SandRidge Energy Inc. (NYSE:SD) to a total of about 27 million shares. SandRidge Energy Inc. (NYSE:SD) has struggled recently due to low natural gas prices, and is currently unprofitable on a trailing basis with Wall Street analysts also forecasting net losses for this year and next year. The company has remained unprofitable despite increased production and a 34% rise in its revenue last quarter compared to the first quarter of 2012. Prem Watsa’s Fairfax Financial Holdings owned more than 32 million shares of SandRidge Energy Inc. (NYSE:SD) as of the beginning of April (find Watsa’s favorite stocks).

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