We recently published a list of the 10 Best Stock Picks of Billionaire Leon Cooperman in 2024. Since Sea Limited (NYSE:SE) ranks 10th on the list, it deserves a deeper look.
Billionaire Leon Cooperman predicted in April that the US is headed for a financial crisis. Cooperman said that the Federal Reserve kept interest rates near zero, but raised them dramatically in a period of 12 months. The Omega Family Office chairman and CEO expects “one or two” rate cuts this year. He emphasized that the market remains overvalued.
In February last year, the billionaire said that the market was headed for a recession, and noted that the S&P 500 high of about 4,800 recorded in 2022 could “stand for some time.” In July 2022, while talking to Bloomberg, Cooperman said that he was “shocked” that interest rates were so low.
“I am of the view that equities are the best house in the financial asset in the neighborhood, but I don’t like the neighborhood, for a lot of reasons.”
Cooperman in the Bloomberg interview in 2022 had categorically said that sooner or later the strong dollar, prices of oil and the Fed would “lead us into a recession.” He went on to add that recession would be a “2023 event” and predicted that the market would bottom somewhere near 35% to 45% below its peak of 4800.
The billionaire had said that he would be “very surprised” if we were to see another bull market anytime soon, given his view that we’ve had one of the biggest bull runs driven by FAANG, SPACs and speculation. The AI revolution that started in 2023 was indeed a shocker for Cooperman as his recession predictions were proven wrong.
For this article we scanned billionaire Leon Cooperman’s Q1 portfolio and picked 10 stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Leon Cooperman of Omega Advisors
Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 51
Billionaire Leon Cooperman’s hedge fund bought a new stake in Singapore-based technology company Sea Limited (NYSE:SE) in the first quarter of 2024. Sea Limited (NYSE:SE) has gained a whopping 90% so far this year. Cooperman’s stake in Sea Limited (NYSE:SE) is worth about $12.9 million. Recently, Sea Limited (NYSE:SE) posted first quarter results. GAAP EPS in the quarter came in at -$0.04, missing estimates by $0.07. Revenue in the quarter jumped about 22.7% year over year to $3.73 billion, surpassing estimates by $110 million. Sea Limited (NYSE:SE) all three segments, Shopee, SeaMoney and Garena have shown strong growth. Shopee has increased its features and offerings which are kicking in. These new improvements include on-time guarantee program, direct management of the return and refund process and increasing quality of products and sellers on its platform. While the Wall Street expects the company to post earnings growth of 129% on average for the next five years, the stock’s valuation has raised some concerns. Its forward P/E is 62, and the stock has a 35x forward EBITDA based on estimates of $1.2 billion in EBITDA. The stock was recently downgraded by JPMorgan to Neutral from Overweight amid increased competition from TikTok and ecommerce platform Temu.
Lakehouse Global Growth Fund also talked about Sea Ltd.’s strong performance and the competitive environment in the region during its April investor letter:
“At the portfolio level, the biggest contributor to performance during the month was Sea Limited (NYSE:SE) (+18.2%), which performed well as both Shopee and its primary competitor, TikTok Shop, raised take-rates meaningfully across several countries during the quarter. This is a noteworthy development as we are now starting to see mounting evidence of more rational competitive behaviour from the dominant players in Southeast Asia’s e-commerce market, which in turn,signals a more favourable industry structure lay ahead.”
Overall, Sea Limited (NYSE:SE) ranks 10th on Insider Monkey’s list titled 10 Best Stock Picks of Billionaire Leon Cooperman in 2024. While we acknowledge the potential of Sea Limited (NYSE:SE), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Sea Limited (NYSE:SE) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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