In this article, we discuss 5 stocks that billionaire Leon Cooperman is buying. If you want to read our detailed analysis of these stocks, go directly to Billionaire Leon Cooperman Is Buying These 10 Stocks.
5. Ellington Financial Inc. (NYSE:EFC)
Number of Hedge Fund Holders: 10
Percentage Increase in Stake During Q4: 14%
Ellington Financial Inc. (NYSE:EFC) is a Connecticut-based real estate investment trust. Elite hedge funds are bullish on the stock. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Ellington Financial Inc. (NYSE:EFC), with 1.1 million shares worth more than $21 million.
Securities filings show that Omega Advisors owned 860,000 shares of Ellington Financial Inc. (NYSE:EFC) at the end of December 2021 worth $14.6 million, representing 0.73% of the portfolio. The company has been in the Omega portfolio since early 2019.
4. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 40
Percentage Increase in Stake During Q4: 24%
Las Vegas Sands Corp. (NYSE:LVS) owns and runs resorts. Cooperman first purchased a stake in the company in the fourth quarter of 2012. This was sold off completely in the next two quarters. He then opened a new position in the firm in the third quarter of 2021, adding to it in the fourth quarter. At the end of December, his fund owned 723,300 shares of Las Vegas Sands Corp. (NYSE:LVS) worth $27 million.
Las Vegas Sands Corp. (NYSE:LVS) is one of the top resort stocks in the finance world. Among the hedge funds being tracked by Insider Monkey, New York-based firm DE Shaw is a leading shareholder in Las Vegas Sands Corp. (NYSE:LVS), with 7.4 million shares worth more than $278 million.
In its Q3 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Las Vegas Sands Corp. (NYSE:LVS) was one of them. Here is what the fund said:
“Las Vegas Sands Corporation: In the most recent quarter, we exited the Fund’s holdings in Las Vegas Sands due to: (i) ongoing COVID-19-related travel restrictions in China, Macau, and Singapore; and (ii) the Macau government’s announcement to tighten its casino regulatory oversight.”
3. DiaMedica Therapeutics Inc. (NASDAQ:DMAC)
Number of Hedge Fund Holders: 7
Percentage Increase in Stake During Q4: 50%
DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is a biopharma firm developing treatments for neurological and kidney diseases. Hedge funds have started noticing the stock in recent months. At the end of the third quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $4.3 million in DiaMedica Therapeutics Inc. (NASDAQ:DMAC), compared to 10 in the preceding quarter worth $8.7 million.
Latest data shows that Omega Advisors owned 300,000 shares of DiaMedica Therapeutics Inc. (NASDAQ:DMAC) at the end of December worth $1.1 million, representing 0.05% of the portfolio. The company has featured in the Omega portfolio since the fourth quarter of 2020.
2. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 77
Percentage Increase in Stake During Q4: 54%
General Motors Company (NYSE:GM) is a Michigan-based automobile manufacturer. Cooperman has owned the stock intermittently since the fourth quarter of 2010. At the end of December, his fund owned 750,000 shares of General Motors Company (NYSE:GM) worth $43 million, representing 2.2% of the portfolio.
Elite hedge funds are exceedingly bullish on General Motors Company (NYSE:GM). Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in General Motors Company (NYSE:GM), with 33 million shares worth more than $1.9 billion.
Miller Value Partners, in its Q3 2021 investor letter, mentioned General Motors Company (NYSE:GM). Here is what the fund has to say about General Motors Company in its letter:
“Another name we’ve recently purchased and have grown incredibly excited about: General Motors (GM). GM is interesting on many levels. We see it as an attractive investment opportunity and it might be a microcosm of current markets, both past and prospective.
Tesla trounced GM over the last decade. Tesla rose 15,797% crushing GM’s 238% increase, which lagged the S&P 500’s 365%. Tesla came out of nowhere creating what many said was the best car ever made. A decade ago, no one saw that coming, including GM. GM’s historical strength led to arrogance. It completely dismissed the threat of any newcomer.
Where are we now? Expectations are entirely different. Tesla’s current price embeds 18 years of growth while GM embeds under one year (see a pattern in what we like?!). Tesla’s expectations look even loftier when you consider that in that 18th year, Tesla would be projected to earn $1.35 trillion revenues at very high, Ferrari-type margins. The largest automakers today generate roughly $250 billion revenues at less than half those margins.
Tesla’s priced to go where no man (or woman!) has gone before. It’s impossible for Tesla to meet these expectations with auto manufacturing alone. It requires something more. Bulls believe Tesla can dominate an autonomous driving future and make significant money on software subscriptions. We don’t have a view on this other than that Tesla needs to do so to be attractive at the current price.
Market expectations for GM, on the other hand, are muted. There appears to be no innovation or growth priced into the stock. Yet GM plans to launch 30 EV (electric vehicles) models globally by 2025 (Tesla has launched a total of 4). GM’s new electric vehicles, like the Hummer and Cadillac Lyric, are extremely impressive. It’s revamping its manufacturing production to be modular, allowing greater speed and adaptability. The entire culture has transformed from a stodgy, bureaucratic old manufacturer to a speedier, more innovative software-enabled automaker. GM currently employs 25,000 software engineers.
GM believes it can double revenues by 2030, and improve margins through software and services. GM currently earns $2 billion of high margin software and services revenue, which is more than Tesla. Cruise, GM’s majority owned autonomous company, recently detailed why it sees the potential for $50B in revenues within 6-8 years of its 2023 launch of the Origin vehicle. BrightDrop, its autonomous commercial vehicle unit, looks promising as well with the potential for $10 billion in revenues. We don’t think this optionality is reflected in the current price. Investors started to see the potential after GM’s recently analyst day. We can easily get values for GM more than double its current price of $58.
The contrast between GM and Tesla illustrates what we see more broadly in the market, which is why we see more opportunity in classic value names than in the secular growth names. After a decade of dominance, expectations for innovative and disruptive companies are quite high. Many classic value companies were caught flat-footed, but have invested heavily to catch up. Muted expectations don’t reflect their improved prospects.”
1. Surgalign Holdings, Inc. (NASDAQ:SRGA)
Number of Hedge Fund Holders: 13
Percentage Increase in Stake During Q4: 117%
Surgalign Holdings, Inc. (NASDAQ:SRGA) operates as a medical technology firm. There is mixed hedge fund sentiment around the stock. At the end of the third quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $8.5 million in Surgalign Holdings, Inc. (NASDAQ:SRGA), compared to 15 in the preceding quarter worth $23 million.
Securities filings show that Omega Advisors owned over 3.3 million shares of Surgalign Holdings, Inc. (NASDAQ:SRGA) at the end of the fourth quarter of 2021 worth $2.3 million, representing 0.11% of the portfolio.
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