After 25 years of service, Leon Cooperman decided to retire as
head of Goldman SachsAsset Management in 1991. His retirement
didn't last very long. Cooperman quickly launched his owninvestment
firm, OmegaAdvisors . Two decades later, approaching his 70th
birthday, Cooperman is outgunning hishedge fund peers, many of whom
are several decades younger. His firm has now amassed nearly $7
billion in assets under management.
We don't yet know how he did for all of 2012, but
according to this report
, Omega Advisors was up 27% through the first nine months of
A quick look at his top holdings shows thefund manager is still
very much on top of his game. These 10 picks,accounting for 38% of
his current portfolio, are all in theblack . (Note that many of
thesestocks have been held for more than a year, so these are
long-term gains and not one-year returns.)
Cooperman also has a deft touch with smaller companies. He may
not be able to buy enough of theirshares to make it on to his
top-10 list, but they are also a fertile source for investment
ideas. His firm has just provided a list of recent moves, which
mostly involve lesser-known, off-the-radar stocks. From the looks
of them, he has some more potentially strong gainers on his
Here's a quick profile of three of them...
1. MDC Partners (Nasdaq:
Cooperman started building a position in this owner of advertising
agencies in the second quarter of 2012, buying 160,000 shares at
about $10. He picked up another 200,000 shares in the next quarter
in the same price range. In light of a fresh filing that shows a
total ownership stake of 6.7% in the firm, we can conclude his
buying has propelled shares higher in recent weeks.
I profiled MDC
back in April 2012, noting that the company'sstock was far
less expensive than rivals such as
Interpublic Group (NYSE:
A few months later,
I also noted
that a recent industry transaction highlighted just how cheap this
stock was (and still is).
Does Cooperman view MDC as a buyout fodder? Or does he
simply see this company as a growth platform positioned to generate
robustcash flow as the globaleconomy mends? Now that he owns more
than 5% of the company, we'll be able to track his moves with MDC
2. Home Loan Servicing (Nasdaq:
Cooperman has had several changes of heart with this provider of
mortgage-processing services. He picked up 470,000 shares in the
first quarter of 2012, sold his whole position during the
followingquarters and just filed a new 620,000-share position. The
twist: The recent purchase came at much higher prices.
Home Loan Servicing shares a key trait with MDC Partners: They
both sport attractivedividend yields. In this instance, Home Loans
has ayield of almost 7%, though looking at Cooperman's averagebasis
in this stock, hiseffective yield is closer to 8%. Perhaps these
two picks signal a subtle shift toward income-producing stocks and
away from growth stocks.
Indeed, in the table of his top 10 holdings above, you'll note
Linn Energy (Nasdaq:
Atlas Pipeline Partners (NYSE:
, both of which have current yields in the 7-8% range.
3. Given Imaging (Nasdaq:
But Cooperman still keeps an eye on stocks that can deliver robust
share price gains. One he's been tracking since 2008 is Given
Imaging, which makes a digestible camera in the shape of a pill
that can provide video images of a person's digestive
By the end of 2010, Cooperman owned 3 million shares of this
company, though he eventually took profits on roughly 1 million
shares. Early in the fourth quarter of 2012, Given Imaging was the
subject of buyout rumors, so shares quickly movedback up toward the
$20 mark. Those buyout talks apparently led nowhere, and shares are
now back down to $16. Cooperman has just noted that he's begun
nibbling at shares again. Itwill be interesting to see whether he
becomes a more aggressive buyer in the months ahead.
Risks to Consider:
Cooperman may have taken profits in some of the stocks noted in
table of top 10 holdings, so it may be unwise to pursue further
research into those stocks until his firm provides a full year-end
update of the portfolio.
Action to Take -->
Though he's been in the business for nearly a half-century,
Cooperman still shows a fertile mind, identifying eclectic
off-the-radar stock picks that are mixed in with more tried-and
trueinvestments . Tracking his fresh filings can be a great way to
identify fresh ideas for your portfolio.
-- David Sterman
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David Sterman does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC owns
shares of MDCA in one or more of its "real money" portfolios.
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