Leon Cooperman’s Omega Advisors has been quite active in Chimera Investment Corporation (NYSE:CIM) since the end of the third quarter of the year. The fund has been building this activist stake for several years, and the current quarter was no exception. Since October 1, Omega boosted its stake by more than 2 million shares, and then started trimming it. Most recently, it disclosed a slight reduction in its exposure to the company; it now owns roughly 66.17 million shares of Common Stock, which account for 6.4% of the company’s shares outstanding.
Leon Cooperman, son of a plumber, was born and raised in South Bronx, and worked his way into Hunter College. After that, he moved on to Columbia Business School where he got an MBA. The day after he graduated, Goldman Sachs hired him a researcher, but Cooperman soon made his way up to general partner and chairman and CEO of Goldman Sachs Asset Management. He retired at the end of 1991, after 25 years of service, to found Omega Advisors, a New York City-based hedge fund with an equity portfolio worth more than $6.7 billion.
Chimera Investment Corporation (NYSE:CIM) is a $3.44 billion market cap specialty finance company that invests, either directly or indirectly (through its subsidiaries), in residential mortgage-backed securities, residential mortgage loans, commercial mortgage loans, & real estate-related securities. As stated above, Cooperman has been accumulating its stock for quite some time now, awaking investors’ interest in the company. However, as we explained in a previous article, there are two things to keep in mind:
First, Chimera is a highly speculative stock that remains mired in an accounting debacle dating back to its inception as a publicly traded company. And second, Cooperman’s resources give him an edge that simply isn’t available to the average investor.
A couple of weeks ago, Chimera Investment Corporation (NYSE:CIM) released its third quarter results. Some highlights are: earnings of $0.37 per share (up from $0.07 per share in 2013); core earnings of $0.11 per share (up from $0.09) and a GAAP book-value of $3.50 per share (also up over 2014).
Other major institutional investors with big wages on this company are Brian Taylor’s Pine River Capital Management, and Joshua Friedman And Mitchell Julis’ Canyon Capital Advisors. By the end of the third quarter, these funds disclosed ownership of 22.87 million shares and 11.84 million shares, respectively.
Despite his long-standing bullishness, Mr. Cooperman disclosed, in latest 13D filing, a reduction in his bet on Chimera Investment Corporation (NYSE:CIM), from 66.62 million shares declared on November 20, to 66.17 million shares on acknowledged on November 25. Despite this drop, his position is still larger that the one declared by the end of the third quarter, with 64.53 million shares, worth about $196 million.
Over the fourth quarter of 2014, Omega Advisors was also active in Atlas Energy LP (NYSE:ATLS). A few weeks ago, the fund disclosed a purchase of 38,600 shares of Common Stock of Atlas Energy LP (NYSE:ATLS), taking its position to more than 6.5 million shares. For some more great investing ideas from Leon Cooperman, check out his top third quarter stock picks.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
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