In this article, we discuss 10 stocks that billionaire Leon Cooperman is buying. If you want to skip our detailed analysis of these stocks, go directly to Billionaire Leon Cooperman Is Buying These 5 Stocks.
In April last year, Leon Cooperman, the head of Omega Advisors, told news platform CNBC in an interview that he expected the stock market to decline in the next twelve months. The remarks of the investor, who has a personal net worth of $2.5 billion, came as the S&P 500 notched up a record month of gains, up 12% year-to-date and 43% in the preceding twelve month period. Cooperman went as far as to say that he was a “fully invested bear” who had an eye on the “exit” as inflation and interest rates climbed.
In September, Cooperman had once again outlined his bearish outlook on the future of the stock market, noting that he had become a “heavily invested bear” and was slowly reducing his stock positions. Cooperman said that a large-scale decline in the market could take place amid recession, an unprecedented hike in interest rates, or a significant geopolitical event. In February 2022, all three of these conditions are unfolding rapidly. The S&P 500 has returned a meager 6.8% since the predictions made by Cooperman in April 2021.
In this bear market, Cooperman has been busy loading up on a select few stocks. Some of the stocks that Omega Advisors has been buying in the fourth quarter of 2021 include General Motors Company (NYSE:GM), Las Vegas Sands Corp. (NYSE:LVS), and Surgalign Holdings, Inc. (NASDAQ:SRGA), among others discussed in detail below.
Our Methodology
The stocks were picked from the fourth quarter regulatory filings of Omega Advisors. Companies in which the fund increased a previously held stake feature on the list.
Data from around 900 elite hedge funds tracked by Insider Monkey in Q3 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Leon Cooperman of Omega Advisors
Billionaire Leon Cooperman Is Buying These Stocks
10. Arbor Realty Trust, Inc. (NYSE:ABR)
Number of Hedge Fund Holders: 13
Percentage Increase in Stake During Q4: 4%
Arbor Realty Trust, Inc. (NYSE:ABR) is a New York-based real estate investment trust. Hedge funds hold large stakes in the company. At the end of the third quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $68 million in Arbor Realty Trust, Inc. (NYSE:ABR), compared to 18 in the previous quarter worth $109 million.
Arbor Realty Trust, Inc. (NYSE:ABR) has featured in the Omega portfolio since the fourth quarter of 2014. At the end of December 2021, the fund owned over 2.3 million shares of Arbor Realty Trust, Inc. (NYSE:ABR) worth close to $43 million, representing 2.15% of the portfolio.
Just like General Motors Company (NYSE:GM), Las Vegas Sands Corp. (NYSE:LVS), and Surgalign Holdings, Inc. (NASDAQ:SRGA), Arbor Realty Trust, Inc. (NYSE:ABR) is one of the stocks that value investors are buying.
9. Coterra Energy Inc. (NYSE:CTRA)
Number of Hedge Fund Holders: N/A
Percentage Increase in Stake During Q4: 5%
Coterra Energy Inc. (NYSE:CTRA) is an independent oil and gas firm. Cooperman first bought a stake in the company during the second quarter of 2014. This was sold off by early 2015. He then opened a new position in the firm in the second quarter of 2021, adding to that stake in the next two quarters. At the end of the fourth quarter of 2021, the fund owned 3.2 million shares of Coterra Energy Inc. (NYSE:CTRA) worth $60 million, representing 3.05% of the portfolio.
Elite hedge funds are bullish on Coterra Energy Inc. (NYSE:CTRA) as energy prices rise. Among the hedge funds being tracked by Insider Monkey, Sydney-based investment firm Antipodes Partners is a leading shareholder in Coterra Energy Inc. (NYSE:CTRA), with 8.4 million shares worth more than $184 million.
In its Q4 2021 investor letter, Palm Valley Capital Management, an asset management firm, highlighted a few stocks and Coterra Energy Inc. (NYSE:CTRA) was one of them. Here is what the fund said:
“Coterra Energy Inc. (NYSE:CTRA), which was known as Cabot Oil & Gas before its merger with Cimarex Energy, was the Fund’s largest contributor in Q3. While we had reduced our weighting as the valuation gap closed, the shares gave back gains in Q4 as natural gas prices fell sharply on above average temperatures.”
8. Finance Of America Companies Inc. (NYSE:FOA)
Number of Hedge Fund Holders: 12
Percentage Increase in Stake During Q4: 7%
Finance Of America Companies Inc. (NYSE:FOA) provides lending products and services. It has attracted the interest of several hedge funds in recent months. At the end of the third quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $87 million in Finance Of America Companies Inc. (NYSE:FOA), compared to 19 in the preceding quarter worth $141 million.
According to the latest data, Omega Advisors owned over 5 million shares of Finance Of America Companies Inc. (NYSE:FOA) at the end of December 2021 worth over $20 million, representing 1% of the total portfolio.
7. Lithia Motors, Inc. (NYSE:LAD)
Number of Hedge Fund Holders: 64
Percentage Increase in Stake During Q4: 10%
Lithia Motors, Inc. (NYSE:LAD) operates as an automotive retailer. The company is a relatively new addition to the Omega portfolio. The fund first purchased a stake in the firm during the second quarter of 2021 and has added to it since. At the end of December 2021, it owned 150,000 shares of Lithia Motors, Inc. (NYSE:LAD) worth $44 million, representing 2.23% of the portfolio.
Hedge funds have been loading up on Lithia Motors, Inc. (NYSE:LAD) stock in recent months. At the end of the third quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in Lithia Motors, Inc. (NYSE:LAD), up from 63 in the preceding quarter worth $2.9 billion.
In its Q3 2020 investor letter, Cartenna Capital, an asset management firm, highlighted a few stocks and Lithia Motors, Inc. (NYSE:LAD) was one of them. Here is what the fund said:
“Another key winner during Q3 for the Fund was our long position in Lithia Motors, Inc. (NYSE:LAD) (“LAD” or “Lithia”). LAD represented a compelling opportunity to own a best-in-class auto dealer at a significant discount and whose fundamental drivers including vehicle miles driven, new/used unit volumes and used pricing, were rapidly accelerating off April’s trough levels. Our thesis centered on three idiosyncratic advantages of Lithia over other auto dealers. First, Lithia’s geographic breakdown offered meaningful exposure to highly dense urban areas like the Tri-State Region (NYC) and coastal California cities, where we believed public transportation and ride sharing would lose share to private automobile transportation. Second, LAD’s rapidly growing used-car business (13.7% same-store sales in 2019) was positioned to disproportionately benefit the Company as 75% of Lithia’s used car inventory is 4+ years old. Used cars of this age are typically less commoditized, more recession resistant and generate higher margins. The third, and most compelling, idiosyncratic opportunity emerged as Lithia’s management revealed a new digital retail strategy. With this new Driveway.com platform, we immediately deemed Lithia to be the best positioned to address the entire vehicle ownership lifecycle in a digital world, take market share, and expand its multiple as new investors appreciated the omnichannel story. Further, Lithia’s new “50 and 50 Plan” outlines a path to achieve $50b1n of revenue and $50 of earnings per share by 2025 (2019: $12.9b1n revenue, $11.76 EPS). Even after a run to $227 per share in late September, Lithia Motors, Inc. (NYSE:LAD) continues to offer a tremendous risk-reward profile.”
6. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders: 36
Percentage Increase in Stake During Q4: 13%
Vertiv Holdings Co (NYSE:VRT) makes and sells critical digital infrastructure technologies. It is one of the top electrical stocks on Wall Street. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Brahman Capital is a leading shareholder in Vertiv Holdings Co (NYSE:VRT), with 5.5 million shares worth more than $138 million.
Regulatory filings show that Omega Advisors owned 2 million shares of Vertiv Holdings Co (NYSE:VRT) at the end of the fourth quarter of 2021 worth $49 million, representing 2.5% of the portfolio. The firm has featured in the portfolio since the third quarter of 2020.
Along with General Motors Company (NYSE:GM), Las Vegas Sands Corp. (NYSE:LVS), and Surgalign Holdings, Inc. (NASDAQ:SRGA), Vertiv Holdings Co (NYSE:VRT) is one of the stocks on the radar of elite investors.
In its Q3 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Vertiv Holdings Co (NYSE:VRT) was one of them. Here is what the fund said:
“The quarter was in many ways a tale of two cyclical areas of the market. Financials gained amid a goldilocks scenario where interest rates looked poised to rise gradually while a strong economy and healthy balance sheets supported historically low credit losses. Whereas financials are relative beneficiaries of gradually rising interest rates potentially driven by higher inflation, industrials and materials are feeling the pinch of broad based supply chain pressures such as shipping costs, semiconductor shortages, scarcity of labor and wage pressure, as well as raw material inflation.
Such was the case with Vertiv Holdings Co (NYSE:VRT), a market leader in thermal and power management solutions for the data center, communications infrastructure and industrial markets. After a +36% gain in share price in the second quarter, Vertiv saw unexpectedly strong inflationary cost pressures from air freight and chip shortages extend into the third quarter and is seeing near-term margin pressure from previously priced orders. From a demand standpoint, the company continues to see its backlog increase with hyperscale and telecom customers, while enterprise demand continues to improve. Vertiv Holdings Co (NYSE:VRT) benefits from attractive end markets as hyperscalers such as Amazon.com, Microsoft, Alphabet and Facebook continue to build data centers needed to support cloud migration and broader digital transformation across various industries.”
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Disclosure. None. Billionaire Leon Cooperman Is Buying These 10 Stocks is originally published on Insider Monkey.
