Billionaire Leon Cooperman’s Favorite Stock Picks

Leon Cooperman has been a well-known investor, praised for his stock picking skills for decades. However, his recent performance has not been great, with his fund, Omega Advisors posting losses in both 2014 and 2015. And, it looks like 2016 could be yet another tough year for the famed hedge fund. A look into the performance of Omega’s 53 equity stakes in companies with a market capitalization of more than $1.0 billion revealed a weighted average loss of 2% over the second quarter, and a 0.6% loss year-to-date. Conversely, the S&P 500 Index gained almost 2.7% during the first three months of 2016. In this article we will take a look into Omega’s top stakes in order to find out what’s changed, and how its picks have performed since the second quarter ended.

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#5. Allergan plc Ordinary Shares (NYSE:AGN)

– Shares Owned by Omega Advisors (as June 30): 671,212

– Value of Omega’s Holding (as of June 30): $155.11 Million

Allergan plc Ordinary Shares (NYSE:AGN) rose two spots in Cooperman’s equity portfolio during the second quarter, even though the stock lost almost 20% of its value, as the fund boosted its exposure by 20%. Even though plenty of funds left the company between April and June, the stock was still the fifth most popular among the funds  we track, counting on the support of 131 funds as of June 30. Among the most bullish institutional investors was Carl Icahn’s Icahn Capital LP, which initiated a stake comprising 3.4 million shares, valued at $785 million, during the second quarter. Shares of Allergan plc Ordinary Shares (NYSE:AGN) staged a rebound in July, before returning into the red territory. However, quarter-to-date the stock has gained 1.1%. Last week, Mizuho Securities upgraded the stock to ‘Buy’ from ‘Neutral’, boosting its price target to $318 from $248.

#4. AerCap Holdings N.V. (NYSE:AER)

– Shares Owned by Omega Advisors (as June 30): 4.62 Million

– Value of Omega’s Holding (as of June 30): $155.27 Million

Slightly more valuable than the stake in Allergan was Cooperman’s position in AerCap Holdings N.V. (NYSE:AER), even though the fund cut the stake by 6% during the second quarter. Even more bullish on the stock was David Einhorn’s Greenlight Capital, which last disclosed ownership of 11.39 million shares worth roughly $382.8 million. AerCap Holdings N.V. (NYSE:AER), which lost roughly 14.1% over the second quarter, has managed to recuperate more than 19.1% of its value since the end of June. Most recently, the stock has been helped by the authorization of a new $250 million buyback program, to be added to the two preexisting programs for this year, and, earlier, by better-than-expected results for the second quarter. EPS of $1.53 came in $0.05 ahead of the consensus estimate, while revenue of $1.24 billion was $10 million higher than expected.

#3. Navient Corp (NASDAQ:NAVI)

– Shares Owned by Omega Advisors (as June 30): 13.8 Million

– Value of Omega’s Holding (as of June 30): $164.95 Million

Occupying the third position in Cooperman’s $3.5 billion equity portfolio as of June 30 was Navient Corp (NASDAQ:NAVI). Despite the fact that the fund sold 277,050 shares over the second quarter, Omega remained the largest institutional investor among those we track, trailed by Clint Carlson’s Carlson Capital, with 3.58 million shares. Shares of Navient Corp (NASDAQ:NAVI) have gained more than 25% year-to-date, and more than 22% since the start of the third quarter. The stock has been helped by a second quarter top and bottom line beat in July and, earlier this week, by the announcement that the company was exercising a call of $175 million in student loans, to be repaid October 25.

#2. First Data Corp (NYSE:FDC)

– Shares Owned by Omega Advisors (as June 30): 15.65 Million

– Value of Omega’s Holding (as of June 30): $173.28 Million

Same as in the previous quarter, First Data Corp (NYSE:FDC) was the second-largest equity stake in Omega’s equity portfolio. Over the quarter, the company saw the number of hedge funds in our database long its stock more than double to 35 from 17. Among them, Cooperman was the largest stockholder, trailed by Peter Adam Hochfelder’s Brahman Capital, which last disclosed ownership of 11.4 million shares, after more than doubling its exposure during the second quarter. Shares of First Data Corp (NYSE:FDC) have been pretty volatile this year and have lost almost 13% year-to-date. However, over the third quarter, its performance has been remarkably strong, having returned more than 25% on the back of strong second-quarter results posted on August 1, and, most recently, after Jefferies initiated coverage on the stock with a ‘Buy’ rating and $16.50 price target.

#1. Alphabet Inc (NASDAQ:GOOGL)

– Shares Owned by Omega Advisors (as June 30): 262,869

– Value of Omega’s Holding (as of June 30): $184.93 Million

Alphabet Inc (NASDAQ:GOOGL) is not only Cooperman’s top pick. Among the funds that we track, 135 were long Alphabet Inc (NASDAQ:GOOGL)’s Class A stock, while 126 were long Alphabet Inc (NASDAQ:GOOG)’s Class C stock at the end of June. Among the largest shareholders as of June 30 is Viking Global, holding 1.79 million Class A shares worth roughly $1.26 billion and 841,255 Class C shares worth about $582 million. Alphabet Inc (NASDAQ:GOOGL) is constantly in the spotlight, but its shares have gained only 1.75% year-to-date. However, during the third quarter, the gains reached almost 14%. On Wednesday, Cooperman appeared on CNBC and said that Alphabet offers “a ‘fortress-like’ balance sheet and a creative, innovative management team.” It’s a must-have stock; “It doesn’t take any special intellect to be long Google,” he concluded.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.