In this article, we will review why billionaire Leon Cooperman is crazy about these 5 stocks. For Leon Cooperman’s portfolio management strategy, history, and hedge fund performance, please see Billionaire Leon Cooperman is Crazy About these 10 Stocks.
5. MP Materials Corp. (NYSE: MP)
Cooperman’s Stake Value: $87,215,000
Percentage of Leon Cooperman’s 13F Portfolio: 5.44%
Number of Hedge Fund Holders: 29
Omega Advisors initiated a position in MP Materials Corp. (NYSE: MP) during the third quarter of last year and left the position unchanged in the first quarter of 2021. The firm held 2.4 million shares of MP at the end of the first quarter, weighted around 5.44% of the overall portfolio. The company does not offer dividends to investors. However, its share price appreciated 11% since the beginning of this year.
Prominent investors were in a less optimistic mood. MP Materials was in 29 hedge funds’ portfolios at the end of the March quarter compared to 32 positions in the previous quarter.
4. Athene Holding Ltd (NYSE: ATH)
Cooperman’s Stake Value: $87,526,000
Percentage of Leon Cooperman’s 13F Portfolio: 5.46%
Number of Hedge Fund Holders: 44
Billionaire Leon Cooperman is crazy about Athene Holding Ltd (NYSE: ATH) as he raised his stake in the insurance company by 57% to 1.73 million shares, accounting for 5.46% of the overall portfolio. Cooperman’s strategy of adding more ATH shares moved in the right direction. This is because the share of Athene Holding grew 45% year to date, extending the twelve-month gains to 76%.
Prominent investors were turning bullish. The number of long hedge fund bets moved up by 8 in recent months. Athene Holding was in 44 hedge funds’ portfolios at the end of the first quarter of 2021 compared to 36 positions in the previous quarter. The all-time high for this statistic is 50.
3. Cigna Corporation (NYSE: CI)
Cooperman’s Stake Value: $102,740,000
Percentage of Leon Cooperman’s 13F Portfolio: 6.4%
Number of Hedge Fund Holders: 53
Omega Advisors held a big stake in Cigna Corporation (NYSE: CI) at the end of the first quarter of 2020, accounting for 6.41% of the overall portfolio. Shares of Cigna contributed to Omega Advisors’ performance during the first quarter. Its share price soared 15% year to date. In addition, the company offers a dividend yield of 1.67% and its quarterly dividend is at $1 per share.
Prominent investors turned less optimistic. The number of long hedge fund bets declined by 4 in recent months. Athene Holding was in 53 hedge funds’ portfolios at the end of the first quarter of 2021 compared to 57 positions in the previous quarter.
2. Fiserv, Inc. (NASDAQ: FISV)
Cooperman’s Stake Value: $122,683,000
Percentage of Leon Cooperman’s 13F Portfolio: 7.65%
Number of Hedge Fund Holders: 75
Leon Cooperman is crazy about Fiserv, Inc. (NASDAQ: FISV) over the last two years. The firm held 122 million worth of stake in Fiserv, accounting for 7.65% of the overall portfolio. The share price of the financial services company is struggling to trade in green this year.
Madison Funds, an investment management firm, highlighted a few stocks including Fiserv in the first quarter investor letter. Here is what Madison Funds stated:
“This quarter we researched several new stock ideas, but because of high prices, acted on only one. Thus, a new portfolio name is Fiserv, with corporate headquarters in Brookfield, WI, just down I-94 from us. Fiserv is a technology company serving financial institutions (“FIs”) and retail merchants. It has two main business lines. In the first, it’s a market leader in outsourced IT solutions for banks and credit unions, online and mobile banking technology, digital money movement solutions, and card issuing services. Fiserv’s second core business is merchant acquiring and processing, where it’s a leader in providing a variety of solutions to help all types of merchants accept digital payments. They entered this business through the acquisition of First Data in 2019.
Within the first business, Fiserv’s software is critical to the daily operations of FI clients. Their solutions not only provide the vital central processing systems, but also enable services such as electronic bill pay and digital money transfers at both large institutions and local banks and credit unions alike. As such, it is an incredibly sticky business that is resilient through economic cycles. On the merchant acquiring side of Fiserv, they process trillions of dollars annually for millions of merchant clients. Their solutions cater to all types of merchants and optimize for seamless acceptance and high authorization rates while also limiting fraud. Similar to the IT outsourcing business, Fiserv’s merchant solutions are critical to their customers’ daily operations. Furthermore, we are especially encouraged by their investments in new solutions, particularly Clover and Carat. Clover is a small and midsize business merchant acquiring platform and Carat is an e-commerce acquiring platform. Both these products hit the bullseye in terms of the way people are interacting with the retail industry, and both are growing at above market rates, which we believe will sustain into the future.
In addition to Fiserv’s favorable business characteristics and competitive positioning, the management team, led by CEO Frank Bisignano, has a track record of successfully investing for growth, improving profitability, and intelligently allocating excess capital. We believe these value-creating activities will continue going forward.
Financial institutions are increasingly making investments to digitize their customer facing products and digital payments are increasingly taking share from cash as a form of payment. As a result, demand for Fiserv’s solutions, should continue to grow nicely in the coming years. In our view, Fiserv offers a nice combination of above average growth, high profitability, business resiliency, and shareholder-friendly management. We do not believe these characteristics were fully reflected in Fiserv’s share price when we made our investment during the quarter at a discount to the market’s 2021 price-to-earnings (P/E) multiple, a valuation level well below Fiserv’s historical premium.
An offsetting trade was the sale of Cognizant Technology Solutions, which was sold around the time Fiserv was added to the portfolio. Cognizant had been held since 2018, and we had expected it to perform similarly to another portfolio holding in the same industry, Accenture. Alas, multiple years of below industry growth challenged the investment, and despite our belief that CEO Brian Humphries could materially improve operations, recent metrics regarding elevated employee turnover and still below-average revenue growth led us to conclude that there was more heavy lifting required at the company. We decided that our investors would be better served by being invested in Fiserv rather than Cognizant.”
1. Alphabet Inc. (NASDAQ: GOOGL)
Cooperman’s Stake Value: $123,751,000
Percentage of Leon Cooperman’s 13F Portfolio: 7.72%
Number of Hedge Fund Holders: 185
Billionaire Leon Cooperman has been holding a position in Alphabet Inc. (NASDAQ: GOOGL) since 2015 and he left his position unchanged in the first quarter of 2021. At the end of the first quarter of 2021, he held 60,000 shares of Alphabet. The company’s stock price is up 36% since the beginning of this year, enlarging twelve-month gains to 65%.
Artisan Partners, a high value-added investment management firm, mentioned a few stocks including Alphabet in the first quarter investor letter. Here is what Artisan Partners stated:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
You can also take a peek at 10 Best Stocks to Buy According to Warren Buffett and 10 Best Stocks to Buy Now According to Bill Gates.
