, chairman and CEO of Omega Advisors, bought 2,302,714 shares of
Resource America Inc. (
) on July 2. The purchase equates to 11% of the company, a
specialized asset business that handles investment opportunities
in the real estate, financial fund management and commercial
Resource America has a $1.2 billion market cap and has had net
losses and declining revenue for the last four years. For the
quarter ended March 31, it reported a net loss of $2.3 billion,
down from a net loss of $4.3 billion in the year-ago quarter,
with growth in its Resource Opportunity REIT and Resource Capital
Corp. real estate-related businesses.
In April, Resource America also purchased a 33% interest in a
world-class global credit management business, CVC Capital
Partners, from which it will collect incentive management fees
worth more than $20 million possibly beginning in 2013.
Cooperman said in a
May CNBC interview
that his firm looks for companies trading at "multiples of
earnings less than the growth rate or selling at a significant
discount to what we perceive to be private market value [the
price a strategic investor would pay for the entire business]."
Resource America has no P/E due to negative earnings, but at
$6.19 per share it is trading near tangible book value of $5.98,
a near all-time low.
The company also has $10.5 million in cash, down from $37.9
million in the year ago quarter, with $51 million in long-term
liabilities and no debt, down from $216 million in long-term
liabilities in the year-ago quarter. Resource America has paid a
$0.03 per-share quarterly dividend for the last year, its lowest
level since 2002, though it has paid a dividend for 17 years.
interview with Steve Forbes on July 2
, Cooperman said he found the market moderately undervalued and
called equities the best house in the financial asset
neighborhood, though he was not sure whether it was "a good
neighborhood or a bad neighborhood." He believes people can
actually lose money on the 10-year government bond at 2%, what he
calls the least attractive investment class at the moment, while
there are many cheap stocks of good companies that will yield
more than bonds, with growth.
"I'm going against the grain, but I'm prepared to be patient," he
His talent for choosing stocks that have advanced in an economy
he called "okay, not great" have pushed his fund to the top in
the first half of 2012. Omega Advisors is up 10% in the first six
months of 2012, Reuters reports, a period in which the average
hedge fund gained 1.7%. Cooperman's return was helped by a
long-term investment in his largest holding Sallie Mae, the
student loan lender, which rebounded 21% year to date.
Cooperman's top holdings below Sallie Mae are two oil and
gas-related companies Atlas Pipeline Partners LP (
) and Linn Energy LLC (
). Another two companies in his top-six holdings are in the oil
and gas industry: El Paso LLC (
) and Transocean (
). On Forbes, Cooperman named energy as an attractive asset
class, saying it was still "a long-term issue."
His third largest is Apple Inc. (
), which he bought in the third quarter of 2010 at an average
price of $260, earning almost double on the investment to date.
On Forbes he commented, "It's hard when something is up much to
recommend it... we do like Apple."
's stock portfolio is here. Also check out the Undervalued
Stocks, Top Growth Companies and High Yield stocks of Leon
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