Billionaire Lee Cooperman’s 5 Stock Picks with Huge Upside Potential

In this article, we discuss billionaire Lee Cooperman’s 5 stock picks with huge upside potential. To read the details of Mr. Cooperman’s life and investment strategy, go directly to Billionaire Lee Cooperman’s 10 Stock Picks with Huge Upside Potential.

5. Regal Rexnord Corporation (NYSE:RRX)

Cooperman’s Stake Value: $66.391 million

Average analyst price target: $163.00

Average analyst price target upside: 31.12%

Regal Rexnord Corporation (NYSE:RRX) is a Wisconsin-based company that is involved in designing and manufacturing electric motors and power transmission components.

Regal Rexnord Corporation (NYSE:RRX) is a dividend stock with a yield of 1.13%. The company’s next quarterly dividend of $0.35 will be paid by January 12 to the shareholders of record on December 29.

On November 1, Regal Rexnord Corporation (NYSE:RRX) released its Q3 earnings result with a non-GAAP EPS of $2.10 and revenue of $1.65 billion, which grew by 24.1% year-over-year (YoY).

Regal Rexnord Corporation (NYSE:RRX) was mentioned in Diamond Hill Capital’s first-quarter 2023 investor letter. Here is what it said:

“Regal Rexnord Corporation (NYSE:RRX) is a manufacturer of electric motors and motion control products for industrial and HVAC equipment. We believe a new management team has Regal on a path to significant operating improvements after adopting a more disciplined approach while the merger with Rexnord’s motion control segment and the recently announced acquisition of Altra Industrial Motion dramatically increases the size of its best business and provides significant opportunities for cost and revenue synergies. Furthermore, Regal Rexnord is in an excellent position to benefit from secular tailwinds such as an increasing focus on energy efficiency, automation, re-shoring and electrification. With the stock trading at a significant discount to our estimate of intrinsic value, we view it as a compelling long-term opportunity.”

4. The Cigna Group (NYSE:CI)

Cooperman’s Stake Value: $77.426 million

Average analyst price target: $345.00

Average analyst price target upside: 28.24%

The Cigna Group (NYSE:CI) is a Connecticut-based healthcare services company that offers medical, dental, disability, life and accident insurance, and more.

On November 29, it was reported that The Cigna Group (NYSE:CI) was carrying out talks with Humana Inc. (NYSE:HUM) about a stock-and-cash merger deal. The $60 billion deal was said to potentially be completed by the end of the year, but experts have commented that it might take longer because of regulatory scrutiny.

According to Insider Monkey’s database that tracks 910 elite hedge funds, 74 funds had investments in The Cigna Group (NYSE:CI)’s stock in the third quarter. Larry Robbins’s Glenview Capital was the most prominent stakeholder in the company, with nearly 1.549 million shares worth $443.07 million.

Davis Funds mentioned The Cigna Group (NYSE:CI) in its third quarter 2023 investor letter. Here is what it said:

“In the attractive healthcare sector, we look beyond the obvious to identify businesses that simultaneously have exposure to this growth industry and also trade at low prices. We’re especially drawn to companies like Cigna Group, whose products or services play a part in helping to mitigate healthcare’s constantly rising costs. The healthcare industry has been a growing part of the U.S. economy for decades. As a result, many companies in this sector trade at high valuations reflecting their robust but well-known reputation for growth. For value-conscious investors like us, investing in healthcare requires looking beyond the obvious to identify businesses that have exposure to this growth industry but which trade at low prices. Furthermore, recognizing that the constantly rising cost of healthcare cannot go on forever, we have been particularly drawn to companies whose products or services play some role in managing or reducing the cost of care. As a result, we have positions in Cigna Group, a well-regarded provider of managed care.”

3. Devon Energy Corporation (NYSE:DVN)

Cooperman’s Stake Value: $109.705 million

Average analyst price target: $56.47

Average analyst price target upside: 25.02%

Devon Energy Corporation (NYSE:DVN) is an energy company that explores, develops, and produces oil, natural gas, and natural gas liquids (NGLs).

On November 27, Stifel decreased the price target on Devon Energy Corporation (NYSE:DVN)’s stock to $77 from $79 and maintained a Buy rating on the shares.

In the third quarter, the number of hedge funds with stakes in Devon Energy Corporation (NYSE:DVN)’s increased to 52 from 45 in the second quarter. With 3.044 million shares worth $145.209 million, Yacktman Asset Management was the most prominent shareholder of the company. In addition, Israel Englander’s Millennium Management was the second biggest stakeholder in Q3 and increased its investment in Devon Energy Corporation (NYSE:DVN) by 116% to 2.97 million shares worth $141.829 million.

2. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)

Cooperman’s Stake Value: $113.33 million

Average analyst price target: $51.83

Average analyst price target upside: 21.72%

WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is a rental and leasing services company focusing on workspace and portable storage solutions in the United States, Canada, and Mexico. The company is headquartered in Phoenix, Arizona.

In its third quarter, WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) posted a GAAP EPS of $0.46, outperforming the estimates by $0.01. The company missed its revenue estimates by $7.51 million, but the revenue was up nearly 4.7% YoY. Furthermore, WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s free cash flow (FCF) was up 77% YoY to $148 million. The company expects to generate an FCF of $550 million by the end of the year.

Over the last three months, 7 analysts have covered WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) with an average price target of $51.83. All of the analysts have a Buy rating on the company stock, and their average analyst price target shows a 21.72% to WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)’s stock price of $42.58 as of the December 1 market close.

Bernzott Capital Advisors made the following comment about WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) in its Q1 2023 investor letter:

“WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC): Exited the position as a result of the company exceeding the upper end of our market cap restrictions due to stock appreciation.

We ended 1Q managing $548 million, with $286 million in our US Small Cap Value strategy. As a bottom-up, fundamental value investor, we seek high-quality companies we believe can compound returns over long periods while proving resilient in downturns. We believe characteristics of a high-quality company include market leadership; recurring revenue or subscription model providing revenue visibility; high margins and operating leverage; high returns on capital; financial flexibility; and a strong management team with skin in the game and a long-term view.”

1. Energy Transfer LP (NYSE:ET)

Cooperman’s Stake Value: $167.132 million

Average analyst price target: $18.33

Average analyst price target upside: 31.97%

Energy Transfer LP (NYSE:ET) is a Texas-based company that deals in natural gas operations and natural gas midstream and transportation and storage solutions.

On November 16, Energy Transfer LP (NYSE:ET) announced that it entered into a non-binding agreement with TotalEnergies SE (NYSE:TTE) to supply 4 million barrels per month of crude oil from Blue Marlin offshore port in Texas.

On November 1, Energy Transfer LP (NYSE:ET) posted Q3 GAAP EPS of $0.15 and revenue of $20.74 billion, which topped the estimates by $350 million.

Out of the 6 Wall Street analysts that covered Energy Transfer LP (NYSE:ET)’s stock, 5 maintain a Buy rating on the shares. The average price target of $18.33 represents an upside of 31.97% as of the December 1 market close.

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