Economics

A Detailed Look Inside Leon Cooperman’s Stock Portfolio

The hedge funder continues to outperform even in the face of erroneous insider trading charges. Below, I take a closer look at his $3.1 billion portfolio and current stock holdings.

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Leon Cooperman: A Career of Triumphs

Leon Cooperman’s career in the investment industry spans over 50 years. After 25 years at Goldman Sachs, he started the hedge fund Omega Advisors, where he remains Chairman and CEO.

Cooperman began his career at Goldman Sachs immediately after graduating with an MBA from Columbia. His focus for most of that time was investment research. He was voted the number one portfolio strategist, in the Institutional Investor "All-America Research Team" survey, for nine consecutive years. When he left the company in 1991 he was chairman and CEO of Goldman Sachs Asset Management. He was also the CIO of the Goldman Sachs Capital Growth Fund.

In 1991 he started Omega Advisors which has gone on to build an enviable track record. Between 1992 and 2014 the fund returned 14.6% a year, and only lost money in four years. It also outperformed the S&P500 during 12 consecutive years from 1999 to 2010.

Cooperman is known for his work ethic, and was described by well-known investor, Doug Kaas, as “the hardest working man in the industry." It’s believed that he has only taken one two-week vacation in his entire career. Another former employee said, “He has no hobbies, no anything. This is what he does."

Unlike many successful investors, Cooperman doesn’t flaunt his wealth. He works because he enjoys it, and not to make money. He supports several charitable causes and has signed Bill Gates and Warren Buffett’s Giving Pledge.

While he has built a $3.1 billion personal fortune, more recently he has run into trouble with the SEC over insider trading allegations. Though he denies any wrongdoing, he settled with the SEC in early 2017. The publicity took its toll on his business, with the result that most of the client funds were withdrawn from Omega Advisors. This leaves the fund with only $3.6 billion, most being Cooperman’s own money.


Any Stock or Bond at the Right Price

Though Leon Cooperman started out as a value investor in the tradition of Ben Graham, he is really a generalist and market timer. He will buy any asset if he believes the price is right, whether it’s a growth stock, a blue chip, a small cap or even a bond. He has said that:

"generally any stock or bond at the right price. I find over the years, if I buy something at the right price, invariably I get lucky."

Cooperman has also said that he looks at a combination of return-on-equity, growth rate, price-to-earnings ratio, dividend yield, and asset value.

Colleagues have said that he knows some companies better than their CEOs and he double checks any numbers he is given. One of his best picks was Teledyne Technologies (NYSE: TDY), which he got to know by meeting with the CEO twice a year for 25 years.

Along with extremely thorough bottom-up company research, he also looks at the macro environment. For instance, he said in 2009 when stock prices stopped falling despite weak earnings, he knew a bottom was forming.

His investment style is aggressive which has generated strong returns over time, but can also lead to periods of significant underperformance. Because he takes decisive bets, when he gets it wrong, he takes substantial losses. Gains elsewhere usually offset these losses, but sometimes everything can go wrong at the same time. Notably, one of his worst years was 1994 when multiple trades in different asset classes didn’t work out. In 1998, he was overexposed to emerging markets during the financial crisis in Russia. As a result, he missed out on the stock market rally in the US and underperformed the market. And in 2008 he didn’t respond to the crisis quickly enough – although his fund outperformed the S&P 500, it still lost 35%.


Omega Advisors's Latest Form 13F Filing

On November 14th, 2017, Leon Cooperman's firm Omega Advisors filed their quarterly Form 13F regulatory filing. I reviewed the 13F filing to review holdings in Omega Advisors' large portfolio.

Omega Advisors' stock portfolio totals nearly $2.6 billion according to the latest filing. The list value of stock holdings is up 7.4% when compared to the last quarter. As a benchmark, the S&P 500 was up 3.9% over the same period.

Quarter-over-Quarter Turnover (QoQ Turnover) measures the level of trading activity in a portfolio. Omega Advisors' QoQ Turnover for the latest quarter was 19.6%, so the firm appears to trade a significant percent of its portfolio each quarter.


Omega Advisors' Largest Holdings

The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed below at the Leon Cooperman page. The following table summarizes his firm's largest holdings reported in the last filing:

Omega Advisors Largest Holdings
TickerNameHolding ($mil)% Of Portfolio
FDCFIRST DATA CORP$163.56.4%
GOOGLALPHABET INC$158.26.1%
AERAERCAP HOLDINGS NV$110.4.3%
UALUNITED CONTINENT...$108.4.2%
SHPGSHIRE PLC$100.23.9%
DWDPDOWDUPONT INC$94.73.7%
MSFTMICROSOFT CORP$86.63.4%

The seven positions above represent 32.0% of the hedge fund's total portfolio.


Omega Advisors' 7 Largest Purchases

I also used finbox.io to find Omega Advisors' largest buys last quarter. Here's the list of the biggest stock purchases determined by comparing the last two filings:

Omega Advisors 7 Largest Purchases
TickerNamePurchased ($mil)% Of Portfolio
DWDPDOWDUPONT INC$94.73.7%
TRNTRINITY INDUSTRI...$29.31.6%
AETAETNA INC$28.61.1%
EXPEEXPEDIA INC$28.11.1%
AMCXAMC NETWORKS INC$27.43.1%
MXLMAXLINEAR INC$26.31.7%
SHPGSHIRE PLC$23.53.9%

Omega Advisors's 7 Biggest Sells

Here's the list of biggest position reductions determined by comparing the last two filings:

Omega Advisors 7 Biggest Sells
TickerNameSold ($mil)% Of Portfolio
DOWDOW CHEMICAL CO/THE$86.23.6%
AGNALLERGAN PLC$71.83.0%
MGMMGM RESORTS INTE...$32.61.0%
AIGAMERICAN INTERNA...$29.92.0%
ARRSARRIS INTERNATIO...$25.41.1%
OMFONEMAIN HOLDINGS INC$23.21.0%
EFCELLINGTON FINANC...$19.0.1%

Omega Advisors' 7 Best Dividend Yields

The next ranking table lists the stocks in Omega Advisors’ portfolio with the best dividend yields. Dividend seekers can appreciate stocks that earn upwards of 6% excluding price appreciation and are also backed by a prominent investor.

Omega Advisors 7 Best Dividend Yields
TickerNameDividend Yield% Of Portfolio
ETPENERGY TRANSFER ...14.1%1.1%
SNRNEW SENIOR INVES...12.7%0.1%
NRZNEW RESIDENTIAL ...11.2%0.9%
EFCELLINGTON FINANC...11.0%0.1%
CIMCHIMERA INVESTME...10.7%0.1%
NEWMNEW MEDIA INVEST...8.6%1.6%
ETEENERGY TRANSFER ...7.1%0.3%

Omega Advisors' 7 Bullish Analyst Targets

Banks and brokerages often release 12 to 18 month price targets for the stocks they cover. Analyst upgrades and downgrades alone can often impact a company's stock price.

"In the short run, the market is a voting machine but in the long run, it is a weighing machine." - Benjamin Graham

The table below ranks stocks in Omega Advisors' portfolio with most bullish analyst targets:

Omega Advisors 7 Bullish Analyst Targets
TickerNameUpside (Analyst Target)% Of Portfolio
LORLLORAL SPACE & CO...97.6%2.3%
INCYINCYTE CORP58.4%0.5%
ETPENERGY TRANSFER ...52.3%1.1%
PTLAPORTOLA PHARMACE...51.2%0.1%
SHPGSHIRE PLC51.1%3.9%
PEPARSLEY ENERGY INC49.1%0.3%
NBRNABORS INDUSTRIE...46.5%0.8%

Most can agree that with thousands of stocks traded on U.S. exchanges, doing thorough research on each one is nearly impossible for smaller investors. Leveraging the resources of the largest hedge funds on Wall Street can be a powerful way to narrow down the list.


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As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.