In this article, we discuss Leon Cooperman’s 10 best performing stocks in 2021. If you want to skip our detailed analysis of Cooperman’s history, investment philosophy, and hedge fund performance, go directly to Leon Cooperman’s Performance in 2021: 5 Best Stock Picks.
Leon Cooperman is an American billionaire hedge fund manager and long-time investor. He is best known in the financial circles for founding Omega Advisors in 1991, which is a New York-based investment advisory firm. He served as the chairman and chief investment officer of Omega Advisors until 2016, before converting Omega into a family office, where majority of the $1.8 billion Q3 portfolio consists of his own personal wealth.
After graduating from Columbia University, Cooperman started his career at The Goldman Sachs Group, Inc. (NYSE:GS), where he eventually gained a reputation as their number one portfolio strategist. In 1991, Cooperman retired from The Goldman Sachs Group, Inc. (NYSE:GS) after 25 years of serving in multiple roles including chairman and chief executive officer of Goldman Sachs Asset Management. He then established Omega Advisors.
“Stocks Are The Best Place To Be”
Leon Cooperman believes that as the economy has rebounded from the COVID-19 pandemic, the stock market has grown stagnant, and he doesn’t rely on major indexes or averages anymore. The billionaire believes that selecting the correct stocks will help investors successfully navigate the stock market. He stated that as long as the cyclical forces that determine the course of the stock market remain positively positioned, he will stay largely invested, as “stocks are the best place to be”.
According to Cooperman, bonds make a good short, and big tech stocks like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:FB) should be given more consideration based on their multiples alone. Cooperman believes that they might seem overpriced or overvalued in the short-term, but if the economy is going to grow and interest rates increase, these blue chip stocks are not overvalued.
Billionaire Leon Cooperman is willing to invest in all kinds of stocks at the right price, and he considers strong free cash flow and good company management while picking securities, rather than the company’s popularity among investors. He also has a particular interest in dividend investing.
The most notable stock picks of Leon Cooperman in the third quarter of 2021 include Alphabet Inc. (NASDAQ:GOOG), General Motors Company (NYSE:GM), and Alibaba Group Holding Limited (NYSE:BABA).
Our Methodology
We used Leon Cooperman’s Q3 portfolio to select the 10 best performing stocks that the billionaire has consistently held in the first, second, and third quarters of 2021. For each stock, we have mentioned its 2021 performance.
Leon Cooperman’s Performance in 2021: Best Stock Picks
10. Falcon Minerals Corporation (NASDAQ:FLMN)
Omega Advisors’ Stake Value: $8,225,000
Percentage of Omega Advisors’ 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 19
Gain in 2021: 44.47%
Falcon Minerals Corporation (NASDAQ:FLMN) is an oil and gas minerals company which has rights for mineral extraction in the Eagle Ford Shale, based in South Texas. The shares gained 44.47% in 2021, which makes Falcon Minerals Corporation (NASDAQ:FLMN) one of the best performing stocks in Leon Cooperman’s third quarter portfolio.
Cooperman acquired a stake in Falcon Minerals Corporation (NASDAQ:FLMN) in the second quarter of 2019, and has consistently increased his position in the company after Q3 2020. Cooperman owns an $8.2 million position in Falcon Minerals Corporation (NASDAQ:FLMN) as of Q3 2021, which accounts for 0.42% of his Q3 portfolio.
On November 3, Falcon Minerals Corporation (NASDAQ:FLMN) declared a $0.155 per share quarterly dividend, which is a 3.3% increase from the prior dividend of $0.150. The dividend was paid on December 8, to shareholders of record on November 23. As of January 21, Falcon Minerals Corporation (NASDAQ:FLMN) delivers a dividend yield of 12.97%.
Desert Peak Minerals and Falcon Minerals Corporation (NASDAQ:FLMN) announced on January 12 that they have entered into an agreement to combine in an all-stock transaction valued at $1.9 billion. The combination will create a mineral and royalty company with a significant footprint in the Permian Basin and Eagle Ford. The transaction is expected to close in the second quarter of 2022, subject to the approval of Falcon Minerals Corporation (NASDAQ:FLMN)’s shareholders. Blackstone, which currently owns 40.6% of the voting power of Falcon Minerals Corporation (NASDAQ:FLMN), is in favor of the transaction.
Stifel analyst Derrick Whitfield classified Falcon Minerals Corporation (NASDAQ:FLMN)’s agreement to merge with Desert Peak Minerals as “transformative,” noting that the combined company will have a significant footprint and be managed by the Desert Peak management team. The analyst also noted that management will pay out majority of the cash flow to shareholders, reiterating a Buy rating and a 12-month price target of $8 on Falcon Minerals Corporation (NASDAQ:FLMN) on January 12.
In the third quarter of 2021, 19 hedge funds were long Falcon Minerals Corporation (NASDAQ:FLMN), down from 25 funds in the prior quarter. Nantahala Capital Management is the leading company stakeholder, with an $11.7 million position.
9. Chimera Investment Corporation (NYSE:CIM)
Omega Advisors’ Stake Value: $50,453,000
Percentage of Omega Advisors’ 13F Portfolio: 2.67%
Number of Hedge Fund Holders: 16
Gain in 2021: 53.45%
Chimera Investment Corporation (NYSE:CIM) is a New York-based real estate investment trust which primarily focuses on residential mortgage loans, asset securitization, and mortgage-backed securities. The stock gained 53.45% in 2021, making it one of the top performing companies from Leon Cooperman’s third quarter portfolio.
Cooperman purchased a stake in Chimera Investment Corporation (NYSE:CIM) in the first quarter of 2015, and kept adding to his position until Q3 2015. The billionaire reduced his position to only 60,000 shares in Q4 2016, and kept it constant until Q1 2019, when he elevated his stake and bought approximately 4.2 million Chimera Investment Corporation (NYSE:CIM) shares. As of the third quarter of 2021, Cooperman owns 3.39 million shares of the company, worth $50.4 million, representing 2.67% of his total Q3 investments.
Chimera Investment Corporation (NYSE:CIM) on December 2 declared a $0.33 per share quarterly dividend, in line with previous. The dividend is payable on January 27, to shareholders of record on December 30. As of January 21, Chimera Investment Corporation (NYSE:CIM) offers a dividend yield of 9.49%.
On January 10, Barclays analyst Mark DeVries raised the price target on Chimera Investment Corporation (NYSE:CIM) to $14 from $11 and kept an Underweight rating on the shares. Conservative expectations for growth, credit, and capital returns biasing estimates higher and below historical multiples should drive stock outperformance in 2022, the analyst tells investors in a research note.
Among the hedge funds tracked by Insider Monkey, Arrowstreet Capital is the largest Chimera Investment Corporation (NYSE:CIM) stakeholder, holding 4.8 million shares worth $71.6 million. Overall, 16 hedge funds were bullish on the stock in the third quarter of 2021.
In addition to Alphabet Inc. (NASDAQ:GOOG), General Motors Company (NYSE:GM), and Alibaba Group Holding Limited (NYSE:BABA), Chimera Investment Corporation (NYSE:CIM) is a notable stock from Leon Cooperman’s third quarter 13F portfolio.
8. MP Materials Corp. (NYSE:MP)
Omega Advisors’ Stake Value: $76,758,000
Percentage of Omega Advisors’ 13F Portfolio: 4.06%
Number of Hedge Fund Holders: 20
Gain in 2021: 55.31%
MP Materials Corp. (NYSE:MP) is a mining company based in Las Vegas, Nevada, which owns the sole rare earth mine and processing facility in the United States. MP Materials Corp. (NYSE:MP) extracts rare earths in concentrate, which are used to power electric vehicles, robotics, wind turbines, drones, and other advanced motion technologies.
Leon Cooperman acquired 2.4 million MP Materials Corp. (NYSE:MP) shares in the fourth quarter of 2020, and kept his stake constant till Q2 2021. In the third quarter, he reduced his position in MP Materials Corp. (NYSE:MP) by 1.83%, and holds 2.3 million shares amounting to $76.75 million. The stock accounts for 4.06% of the billionaire’s Q3 investments.
On December 9, MP Materials Corp. (NYSE:MP) announced that it will build its initial rare earth, metal, alloy, and magnet manufacturing facility in Fort Worth, Texas. The company also disclosed that it has entered a binding, long-term agreement with General Motors Company (NYSE:GM) to supply rare earth materials, alloy, and finished magnets sourced and manufactured in the US for the electric motors in more than a dozen models using General Motors Company (NYSE:GM)’s Ultium Platform.
BofA analyst Lawson Winder initiated coverage of MP Materials Corp. (NYSE:MP) on November 30 with a Buy rating and a $52 price target. The analyst views the company as a “critical raw material supplier” for electric vehicles, also noting that his price target assumes an 18-times expected 2023 EBITDA multiple.
According to Insider Monkey’s Q3 data, 20 hedge funds were bullish on MP Materials Corp. (NYSE:MP), with stakes totaling $2.18 billion.
7. Microsoft Corporation (NASDAQ:MSFT)
Omega Advisors’ Stake Value: $69,269,000
Percentage of Omega Advisors’ 13F Portfolio: 3.67%
Number of Hedge Fund Holders: 250
Gain in 2021: 55.87%
Microsoft Corporation (NASDAQ:MSFT)’s shares gained 55.87% in 2021, making the US tech giant one of the top performing stocks from Leon Cooperman’s Q3 portfolio. Cooperman first acquired his Microsoft Corporation (NASDAQ:MSFT) stake in Q4 2010, but he did not consistently keep the stock in his portfolio over the years. Microsoft Corporation (NASDAQ:MSFT) has been a constant position in Cooperman’s 13F portfolio since Q4 2015. As of the third quarter of 2021, the billionaire owns 245,705 shares of Microsoft Corporation (NASDAQ:MSFT), worth $69.2 million, representing 3.67% of his total securities.
Elite hedge funds are bullish on Microsoft Corporation (NASDAQ:MSFT) as of Q3 2021, with 250 funds holding stakes in the company worth $65.8 billion, as per Insider Monkey’s database. Fisher Asset Management is the biggest Microsoft Corporation (NASDAQ:MSFT) stakeholder, owning 25.5 million shares, valued at $7.1 billion.
In addition to MSFT, Alphabet Inc. (NASDAQ:GOOG), General Motors Company (NYSE:GM), and Alibaba Group Holding Limited (NYSE:BABA) is a notable stock pick of Leon Cooperman.
Here is what Claret Asset Management has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q4 2021 investor letter:
“Our biggest undertaking in 2021 was a conversion of our technology platform from a local area network within our office to having our proprietary network all in the “cloud.” We have chosen Microsoft Corporation (NASDAQ:MSFT) and their Azure system as our partner, as we feel they are the best positioned to service our network, which includes Microsoft 365 Office, their data facilities all in Quebec and Ontario and as they learn the products in depth, we feel they are best able to defend each endpoint against any cyber attacks that may create havoc for us and for our clients. We want to protect your privacy and ours, and offer you a seamless and confidential information environment. Additionally, the IT engineering firm we use to ensure 24/7 coverage of our system and the operation of the equipment to optimize our service levels and the integrity of our reporting and data protection. In 2021, we completed our client reporting migration to Croesus and we now have client portals for each client and relationship – if you haven’t signed in yet, please do so as all your documents and quarterly reports can be made available for you to view at your convenience in the “privacy” of your own personal devices whether desktop or mobile. You are able to store these documents in a secure environment, eliminating the need to keep “paper” copies if you prefer.”
6. Pioneer Natural Resources Company (NYSE:PXD)
Omega Advisors’ Stake Value: $23,311,000
Percentage of Omega Advisors’ 13F Portfolio: 1.23%
Number of Hedge Fund Holders: 48
Gain in 2021: 59.74%
Pioneer Natural Resources Company (NYSE:PXD) is a Texas-based company involved in hydrocarbon exploration, supplying petroleum, natural gas, and natural gas condensate.
Leon Cooperman initially purchased a stake in Pioneer Natural Resources Company (NYSE:PXD) in Q2 2016, but sold his shares in the next quarter. He invested in Pioneer Natural Resources Company (NYSE:PXD) again in the first quarter of 2021, buying 80,000 shares of the company. He elevated his stake in Q2 2021 to 140,000 shares, which are worth $23.3 million as of September 2021, representing 1.23% of the billionaire’s total Q3 investments.
On November 3, Pioneer Natural Resources Company (NYSE:PXD) declared a $0.62 per share quarterly dividend, which is a 10.7% increase from its prior dividend of $0.56. The dividend was paid on January 14, to shareholders of record on December 31. The company also announced on November 3 a $3.02 per share special dividend, which was distributed on December 14.
Truist analyst Neal Dingmann on January 14 raised the price target on Pioneer Natural Resources Company (NYSE:PXD) to $230 from $214 and kept a Hold rating on the shares as part of a broader research note updating his Exploration & Production group model.
A total of 48 hedge funds were long Pioneer Natural Resources Company (NYSE:PXD) in the third quarter of 2021, and Adage Capital Management is the largest stakeholder of the company, with 1.5 million shares worth $262.4 million.
Like Alphabet Inc. (NASDAQ:GOOG), General Motors Company (NYSE:GM), and Alibaba Group Holding Limited (NYSE:BABA), Pioneer Natural Resources Company (NYSE:PXD) is a popular stock among the smart money.
Here is what ClearBridge Investments Dividend Strategy has to say about Pioneer Natural Resources Company (NYSE:PXD) in its Q3 2021 investor letter:
“Over the last year we have also added a position in Pioneer Natural Resources, a best-in-class producer in the Permian Basin. We added Pioneer as we anticipated rising commodity prices and sought more direct leverage to that trend. Our overweight to energy has benefited our performance this year, in particular through the first half of the year, and we believe the sector, still less than 3% of the S&P 500, remains underinvested and attractive going forward.”
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Disclosure: None. Leon Cooperman’s Performance in 2021: 10 Best Stock Picks is originally published on Insider Monkey.
