We recently compiled a list titled Leon Cooperman Stock Portfolio: Top 12 Picks. In this article, we will look at where WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) ranks among other stocks in Leon Cooperman’s portfolio.
Omega Advisors, Inc., an investment firm based in New York, specializes in providing advisory and portfolio management services. The firm focuses on domestic public equity and employs hedging strategies to protect its investments. Leon Cooperman, the chairman and CEO, follows a value-oriented investment strategy that emphasizes value equities and utilizes a top-down approach to select sectors for investment. His methodology integrates fundamental analysis to manage both long and short positions, which helps in constructing diversified portfolios. These portfolios are assessed against the S&P 500 index to gauge their performance effectively.
Leon G. Cooperman is a billionaire investor known for his significant contributions to the investment landscape. He is the first in his family to earn a college degree, graduating from Hunter College, where he was active in the Alpha Epsilon Pi fraternity. After completing his education, Cooperman began his career as a quality control engineer at Xerox in 1965 and later earned an MBA from Columbia Business School in 1967. He is also a Chartered Financial Analyst (CFA), which reflects his deep knowledge of investment analysis and portfolio management.
Leon Cooperman Warns of Rising National Debt
In a recent CNBC interview on September 25, Leon Cooperman expressed significant concerns about two main issues affecting the economy. He highlighted the national debt, which has surged from $20 trillion in 2017 to $34 trillion in 2024, growing at a rate that far outpaces the economy. He warns that this increase could lead to serious problems in the future, especially since candidates running for office are not addressing the deficit.
“I’m very concerned about two things. One is the debt buildup. We have two candidates running for office, and neither one talks about the deficit or the buildup of debt. In 2017, I think our national debt was $20 trillion. Seven years later, it’s $34 trillion. That’s a growth rate far in excess of the growth rate of the economy, and it’s going to be a problem one day.”
When asked if the Fed’s rate cuts have led him to invest more in stocks, Leon Cooperman replied that he is already fully invested, primarily in various assets. He has allocated about 20% of his portfolio to bonds and believes the government’s conduct is disappointing. Additionally, he has around 15% in energy investments, seeing potential in that sector due to current events in the Middle East. He noted that while the Fed is cutting short-term rates, he anticipates long-term rates will rise, particularly for ten-year bonds.
Cooperman was also asked about the Fed’s rate cuts and their impact on the economy. He responded that short-term rates are currently too high compared to historical standards. He explained that the yield on the ten-year government bond should align with GDP growth, which he estimates at around 5% (2.5% real growth plus 2.5% inflation). He believes that at a 5% yield, the ten-year bond is undervalued and anticipates rates will rise.
Leon Cooperman Thinks “Stocks Are The Place To Be”
Leon Cooperman expressed concerns about the potential future problems with government debt, suggesting that issues may arise unexpectedly. At 81 years old, he reflected on his experience during past market bubbles in 2000 and 1972, emphasizing his belief that stocks remain the best investment choice while avoiding bonds.
“I may be too old. Take me out behind the barn and shoot me. I’m 81 years old. I’ve been through a couple of bubbles—the 2000 bubble and the 1972 bubble… I think stocks are the best place to be. I would avoid bonds.”
Our Methodology
This article reviews the top 12 stock holdings of Omega Advisors as of the second quarter of 2024, highlighting the number of hedge funds also invested in these companies. The stocks are organized in ascending order based on Omega Advisors’ stake as of June 30, 2024.
At Insider Monkey we are obsessed with 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).
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Total Number of Shares Owned: 3,607,500
Total Value of Shares Owned: $135,786,300
Number of Hedge Fund Investors: 53
As North America’s largest provider of modular space and portable storage solutions, WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) serves a variety of industries, including construction, healthcare, and education. This market leadership allows WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) to benefit from the rising demand for flexible space solutions, as evidenced by solid growth in leasing revenue in Q2 2024.
To enhance profitability,WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) has initiated organizational changes aimed at achieving $40 million in annual cost savings. These improvements focus on increasing sales efficiency, optimizing logistics, and leveraging technological advancements to boost margins. Furthermore, the recent acquisition of McGrath RentCorp is a strategic move that strengthens WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s market dominance, although it has faced some regulatory scrutiny. This acquisition demonstrates WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s commitment to expanding its presence in the market and creating synergies for growth.
Despite reducing its revenue and EBITDA guidance, the financial outlook remains positive, with analysts optimistic about WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s strong cash flow generation. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) projects a free cash flow of approximately $700 million by 2026, offering an attractive yield for long-term investors. While short-term challenges such as softer demand and increased tax impacts may pose difficulties, WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s strategic focus on efficiency, acquisitions, and cash flow generation supports a compelling investment case.
Omega Advisors, Inc. holds 3,607,500 shares of WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), valued at $135,786,300.
ClearBridge SMID Cap Growth Strategy stated the following regarding WillScot Holdings Corporation (NASDAQ:WSC) in its Q2 2024 investor letter:
“Stock selection in industrials was the leading detractor from relative performance, as the prospect of a higher-for-longer interest rates environment weighed on investors’ outlooks for industrial and nonresidential construction. Also impacted was WillScot Holdings Corporation (NASDAQ:WSC), the North American leader in turnkey modular space and portable storage solutions. The company’s stock price pulled back amid a decline in nonresidential construction starts and a less optimistic outlook for short-cycle industrials. However, WillScot continues to have high cash flow yields and a strong order backlog, which should help the company to weather near-term headwinds.”
Overall WSC ranks 6th on our list of top picks in Leon Cooperman’s stock portfolio. While we acknowledge the potential of WSC as an investment, our conviction lies in the belief that under the radar 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 WSC 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 on Insider Monkey.
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