Below we present the list of 5 Best Finance Stocks to Buy Right Now According to Leon Cooperman. For our methodology and a more comprehensive list please see 10 Best Finance Stocks to Buy Right Now According to Leon Cooperman. Note that all hedge fund data is based on the exclusive group of 800+ funds tracked by Insider Monkey as part of our market-beating investment strategy.
5. Ocwen Financial Corporation (NYSE:OCN)
Ocwen Financial Corporation (NYSE:OCN) is up first among Leon Cooperman’s top finance stock picks. The billionaire Chairman and CEO of Omega Advisors owned 879,037 OCN shares on September 30 according to his latest 13F filing and has held a stake in the mortgage services company dating back to 2017.
Hedge fund ownership of Ocwen has withered over the last five years, falling by 71%, identical to the amount which the stock has declined over the last five years. OCN shares did get a boost from Cooperman in early February when he remarked on CNBC that they had been oversold since Ocwen’s acquisition of PHH in October 2018, a move which piled on debt and weighed on operations. Ocwen shares have gained just under 50% this year as the company moves towards a return to profitability in 2021.
4. Navient Corp (NASDAQ:NAVI)
Hedge fund ownership of Navient Corp (NASDAQ:NAVI) has declined significantly this year, sliding by 73%. Leon Cooperman is going against the grain in that regard, as he added another 210,000 NAVI shares to his position during Q3, giving him a total of 3.18 million.
Cooperman was caught up in a political row over the student loan services company last year after Democratic nominee Elizabeth Warren called for a tax on billionaires which would be used to fund student loan forgiveness, which would be a big hit for companies like Navient. Cooperman called out Warren for her vilification of billionaires and called her plans “idiocy”, which prompted her to suggest Cooperman was simply looking out for his own interests as a NAVI shareholder, a company which she characterized as having cheated borrowers and used misleading and abusive tactics against them.
Navient’s education loan portfolio helped lift the company to strong Q3 results, as it earned core EPS of $0.99, topping estimates by over 20%. The delinquency rate on its private education loans dropped by 50% during the quarter to 2.4%.
3. Athene Holding Ltd (NYSE:ATH)
Leon Cooperman took a new stake in Athene Holding Ltd (NYSE:ATH) during Q3, buying 981,606 ATH shares, making it his second largest purchase of the quarter after Alphabet Inc. (NASDAQ:GOOG). Athene shares have gained 29% since the end of October but are still down 13% this year.
Anthony Bozza of Lakewood Capital Partners discussed his ATH holding in his Q2 investor letter, expressing confidence that with shares trading at just 60% of the insurer’s tangible book value (at the time), they had the potential to double over the next 18 months. He pointed to the recent acquisition of Athene competitor Global Atlantic at a price point of 1x tangible book value as an example of why the market is undervaluing Athene, whose tangible book value he expects to continue growing at a steady pace throughout 2021.
2. Cigna Corp (NYSE:CI)
Leon Cooperman owns 425,000 shares of Cigna Corp (NYSE:CI) as of September 30. Cigna represented the billionaire money manager’s largest holding at the end of June, but he sold off 120,000 CI shares during Q3, dropping it to fourth overall. Cooperman has held the stock in his 13F portfolio since the third quarter of 2018.
Cooperman referenced the healthcare insurer during a November CNBC interview, noting that while the S&P 500 is trading at sky-high multiples, there are still good deals to be found out there in the 4x-8x earnings range, pointing to Cigna as one such company that has a good story. Cigna currently trades at a forward P/E of about 9.5x.
In its Q3 investor letter, Avenir Capital noted that Cigna was underperforming ahead of the U.S Presidential election, as healthcare stocks traditionally do, over concerns that a Biden win coupled with the Democrats winning the senate could result in unfavorable policy changes. While Biden won the Presidency, the Republicans retained control of the senate, sending CI shares up by 15% following the election.
1. Mr. Cooper Group Inc. (NASDAQ:COOP)
Topping the list of best finance stocks to buy right now is mortgage servicing company Mr. Cooper Group Inc. (NASDAQ:COOP), which Mr. Cooperman has owned since the third quarter of 2018. At the end of September 2020, he owned 4.65 million COOP shares, making him the largest shareholder of the stock in our hedge fund database.
COOP shares got a 3.8% bump in premarket trading on November 6 after Cooperman recommended the company on CNBC, not that the stock needed the help; it’s gained 145% this year. Back in June, Cooperman claimed the company’s book value was $24 per share at a time when shares were trading at just $13. They’re now trading hands at over $30.
Mortgage originators are performing extremely well right now given the favorable housing market conditions, which should persist into 2021, driving further book value and cash flow gains for Mr. Cooper; and further share price gains for Mr. Cooperman.
For some mouthwatering investment ideas that could generate strong returns in a post-pandemic world, don’t miss out on our list of the Top 10 Restaurant Stocks to Buy Now.
Disclosure: None.
