Omega Advisors recently disclosed its stock holdings via a 13F filing. I analyzed the firm’s holdings and found the most attractive stocks based on dividend yields, P/E ratios as well as other fundamental indicators.
Check out our H2 hedge fund letters here.
Every month and quarter, multiple reports on average hedge fund returns are released from several sources. However, it can be difficult to sift through the many returns to uncover the most consistent hedge funds. The good news is that Eric Uhlfelder recently released his "2022 Survey of the Top 50 Hedge Funds," which ranks the Read More
Finding The Right Price
Leon Cooperman is the chairman and CEO of Omega Advisors, a New York-based investment advisory firm managing over $3.5 billion in AUM. Although many consider Cooperman as a traditional value investor, he is also 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:
“I’ll buy 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.”
In order to find if the price is right, Cooperman has said that he looks at a combination of intrinsic values, dividend yields, price-to-earnings ratios, and growth rates.
So I went through Omega Advisors’ stock portfolio as listed in its recent 13F filing to find the most attractive stocks for each of the criteria mentioned above.
Omega Advisors’ Most Undervalued Holdings
To determine which stocks are trading below their intrinsic value, aka “fair value” I used the finbox.io Fair Value estimates. I also applied consensus Wall Street analyst price targets to create a blended upside which I then used to rank the most undervalued holdings.
Here are the top 7 stocks in Leon Cooperman’s portfolio based on my calculations:
|Ticker||Name||Upside (finbox.io)||Upside (Analyst Target)||Blend Upside|
|CX||CEMEX SAB DE CV||67.7%||43.3%||55.5%|
|MDCA||MDC PARTNERS INC||37.4%||58.8%||48.1%|
|SBGI||SINCLAIR BROADCAST GROUP INC||33.4%||51.1%||42.3%|
|ETE||ENERGY TRANSFER EQUITY LP||38.8%||34.4%||36.6%|
|FDC||FIRST DATA CORP||33.4%||39.7%||36.5%|
Cemex SAB de CV (ADR) (NYSE: CX) appears to be the most undervalued stock in the fund. The company has a blended upside of 55.5% relative to its current trading price.
MDC Partners Inc (Nasdaq: MDCA) appears to be the second most undervalued stock in the portfolio. The company’s blended upside of 48.1% is very intriguing. Value investors may want to take a closer look at the stocks above.
Omega Advisors’ 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 5% excluding price appreciation and are also backed by a prominent investor.
|Ticker||Name||Dividend Yield||% Of Portfolio|
|SNR||NEW SENIOR INVESTMENT GROUP IN||12.6%||0.1%|
|CIM||CHIMERA INVESTMENT CORP||11.6%||0.1%|
|EFC||ELLINGTON FINANCIAL LLC||11.3%||0.1%|
|NEWM||NEW MEDIA INVESTMENT GROUP INC||8.6%||1.6%|
|GLPI||GAMING AND LEISURE PROPERTIES||7.6%||0.4%|
|ETE||ENERGY TRANSFER EQUITY LP||7.6%||0.7%|
New Senior Investment Group Inc (NYSE: SNR) is the highest yielding dividend stock in Omega Advisors’ portfolio. The current share price and dividend offer income investors a yield of 12.6%.
CHIMERA Invt Co/SH NEW (NYSE: CIM) is the next highest dividend yielding stock in Leon Cooperman’s portfolio which currently offers a yield of 11.6%.
Omega Advisors’ Low P/E Ratio Stocks
The P/E Ratio indicates the multiple of earnings stock investors are willing to pay for one share of the company. A low P/E can indicate either that a company may currently be undervalued or that the company is doing exceptionally well relative to its past trends. The following table summarizes the firm’s holdings with the lowest P/E multiple.
|Ticker||Name||P/E Ratio LTM||% Of Portfolio|
|CIM||CHIMERA INVESTMENT CORP||5.3x||0.1%|
|MVC||MVC CAPITAL INC||6.9x||0.1%|
|AMCX||AMC NETWORKS INC||9.6x||5.8%|
|UAL||UNITED CONTINENTAL HOLDINGS IN||9.9x||5.7%|
|ALLY||ALLY FINANCIAL INC||12.3x||1.0%|
Mentioned for the second time, the cheapest stock that Omega Advisors owns is CHIMERA (NYSE: CIM) which currently trades at 5.3x earnings.
The next cheapest stock that Leon Cooperman owns is Navient Corp (Nasdaq: NAVI) which has a P/E ratio of 6.8x.
Omega Advisors’ Fastest Growing Stocks
Analysts often look at companies as either thriving, surviving or dying. Analyzing a company’s revenue growth can help distinguish between these stages. Growth of over 10% typically signifies the core business is doing very well and the company’s products and services are in demand.
The table below lists 7 stocks in Omega Advisors’ portfolio that have strong top-line growth.
|Ticker||Name||Revenue Growth||% Of Portfolio|
|PE||PARSLEY ENERGY INC||118.7%||1.9%|
|DXC||DXC TECHNOLOGY CO||115.8%||1.0%|
|ETE||ENERGY TRANSFER EQUITY LP||46.8%||0.7%|
|DVMT||DELL TECHNOLOGIES INC||42.2%||1.9%|
Amicus Therapeutics, Inc. (Nasdaq: FOLD) is the fastest growing company in Omega Advisors’ portfolio. The company’s LTM total revenue of $25 million is up over 1,000% year-over-year. Very impressive. Note that the stock price is also up 106.6% over the last twelve months.
The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed above at the Omega Advisors page.
Who Is Leon Cooperman And Why Track His Holdings?
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. It also outperformed the S&P 500 Index 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.” During this time, Cooperman has built a personal fortune of $3.1 billion.
It is important to note that Cooperman’s holdings discussed above were determined from filings which are due 45 days after the quarter end date. Therefore, Omega Advisors’ holdings above represent positions held as of December 31st and not necessarily reflective of the fund’s current stock holdings.
Article by Finbox.io