In this article, we discuss Leon Cooperman’s 5 best performing stocks in 2021. If you want our detailed analysis of Cooperman’s history, investment philosophy, and hedge fund performance, go directly to Leon Cooperman’s Performance in 2021: 10 Best Stock Picks.
5. Motorola Solutions, Inc. (NYSE:MSI)
Omega Advisors’ Stake Value: $23,232,000
Percentage of Omega Advisors’ 13F Portfolio: 1.23%
Number of Hedge Fund Holders: 34
Gain in 2021: 61.84%
Motorola Solutions, Inc. (NYSE:MSI) is a Chicago-based provider of mission-critical communications equipment, command center software, video security and analytics, and technical support services. Leon Cooperman owns 100,000 Motorola Solutions, Inc. (NYSE:MSI) shares as of Q3 2021, worth $23.2 million, representing 1.23% of his 13F securities. Motorola Solutions, Inc. (NYSE:MSI) shares gained 61.84% in 2021, making it one of the billionaire’s top performing stock picks.
On November 18, Motorola Solutions, Inc. (NYSE:MSI) declared a $0.79 per share quarterly dividend, which reflects an 11.3% increase from the prior dividend of $0.71. The dividend was paid on January 14, to shareholders of record on December 15.
The U.S. Department of Defense on January 11 initiated a contract worth $29 million with Motorola Solutions, Inc. (NYSE:MSI), which will extend the operations and maintenance of the U.S. Navy’s land mobile radio LMR system. Under this contract, Motorola Solutions, Inc. (NYSE:MSI) will provide maintenance of hardware and software, equipment repair and replacement, management of software licenses, asset and configuration management, password management, vulnerability scanning, and benchmark testing.
Argus analyst Jim Kelleher upgraded Motorola Solutions, Inc. (NYSE:MSI) to Buy from Hold with a $280 price target on November 11.
Among the hedge funds tracked by Insider Monkey in Q3 2021, Orbis Investment Management is the largest Motorola Solutions, Inc. (NYSE:MSI) stakeholder, owning a $484.3 million position in the company. Overall, 34 hedge funds were bullish on the stock in the third quarter.
Here is what Wedgewood Partners has to say about Motorola Solutions, Inc. (NYSE:MSI) in its Q4 2021 investor letter:
“Top fourth quarter performance contributors include Motorola Solutions. Motorola Solutions generated +13% revenue growth and drove over +20% earnings per share growth as it sold a higher mix of high-margin, recurring software, with Company-wide margins well above-above pre-COVID peaks. Motorola is a key partner with public safety and corporate customers who operate land mobile radio (LMR) networks for decades, which requires numerous software updates and constant cybersecurity support. Further, the Company has amassed a suite of software offerings that manage public safety emergency and 911 call center workflows. We expect Motorola’s core public safety market to continue adopting these software and service solutions that drive higher productivity in the face of chronic labor shortages.”
4. Gannett Co., Inc. (NYSE:GCI)
Omega Advisors’ Stake Value: $10,321,000
Percentage of Omega Advisors’ 13F Portfolio: 0.54%
Number of Hedge Fund Holders: 18
Gain in 2021: 64.98%
Headquartered in Virginia, Gannett Co., Inc. (NYSE:GCI) is a mass media holding company that is the leading U.S. newspaper publisher as measured by total daily circulation. Gannett Co., Inc. (NYSE:GCI) owns the national newspaper, USA Today, and several local newspapers in different states.
Leon Cooperman acquired a position in Gannett Co., Inc. (NYSE:GCI) in the fourth quarter of 2019, buying over 7.5 million shares of the company. He has reduced his stake since acquisition, and holds 1.5 million Gannett Co., Inc. (NYSE:GCI) shares as of Q3 2021, worth $10.3 million, representing 0.54% of his total third quarter investments.
Of the 18 hedge funds that were bullish on Gannett Co., Inc. (NYSE:GCI) in the third quarter of 2021, Ophir Asset Management is the biggest stakeholder of the company, with 7.2 million shares, valued at $48.75 million.
Gannett Co., Inc. (NYSE:GCI) has also participated in the NFT and crypto frenzy that is taking over the market. The company announced on November 22 that it will auction NFTs in collaboration with American contemporary artist Peter Tunney. The highest bidder of the “LIBERTY” NFT will also receive the original painting created exclusively for Gannett Co., Inc. (NYSE:GCI) by Peter Tunney. The auction will be hosted on OpenSea, the first and largest marketplace for NFTs. This is Gannett Co., Inc. (NYSE:GCI)’s second NFT auction, following its inaugural auction in June.
Here is what Miller Value Partners has to say about Gannett Co., Inc. (NYSE:GCI) in its Q3 2021 investor letter:
“During the quarter, our only significant positive contributor was Gannett (GCI), which was up in excess of 20%. Management has an aggressive transformation plan that is starting to gain operational traction. Their content subscribers are beginning to scale and should eventually provide an attractive recurring revenue and cash flow stream that will allow the enterprise to return to growth. Achieving their 10M digital subscriber target should generate close to $1B in high margin annual subscription revenue. Secondly, Gannett is aggressively scaling a Digital Marketing Solutions (“DMS”) and Event/Promotion business. DMS currently serves more than 20K small- to medium- sized businesses, with only a 2% market share of a large market (>$18B); Gannet has a significant upcoming growth opportunity. Management is targeting more than $1B in combined revenue from these two efforts over the next couple of years. It is worth highlighting that similar businesses today in the marketplace are being valued at more than 5x revenue. Success of these new growth initiatives could generate more than $2B revenue at higher than average company margins. Even with the recent price increase, we believe Gannett still has limited success from the transformation reflected in its share price, as it has one of the lowest price-to-sales multiples in the marketplace (currently at .25x). The transformation plan has the potential to unlock significant additional equity value as the business mix shifts, free cash flow generation accelerates (normalized free cash flow yield >50%), and their valuation multiples start to narrow with the significant discount to their public company peers.
We invest in our companies with a long-term perspective. Our process is focused on understanding the fundamentals of the business and long-term fundamental value. We roll up our sleeves and dive deep into the names we hold, regularly speaking with management to better understand the asset base and key drivers of the business model. We see this as an advantage in periods where our companies may see short-term fluctuations in their share price, such as what happened in the third quarter. We are looking for embedded value that has significant realization potential over a time horizon much longer than the market’s somewhat shorter-term view.”
3. Alphabet Inc. (NASDAQ:GOOG)
Omega Advisors’ Stake Value: $160,411,000
Percentage of Omega Advisors’ 13F Portfolio: 8.50%
Number of Hedge Fund Holders: 156
Gain in 2021: 68.96%
Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, is the second largest holding in Leon Cooperman’s third quarter portfolio. Alphabet Inc. (NASDAQ:GOOG)’s solid Q3 results, with above consensus EPS and revenue, as well as the 67% share gain in 2021, makes it one of Cooperman’s best stock picks from the period.
Cooperman first invested in Alphabet Inc. (NASDAQ:GOOG) back in Q3 2015, and held his stake in the tech giant over the years, before he sold out of it completely in Q2 2020, only to buy back 60,000 Alphabet Inc. (NASDAQ:GOOG) shares in the next quarter. As of Q3 2021, Cooperman’s Alphabet Inc. (NASDAQ:GOOG) stake is worth $160.4 million, representing 8.50% of his total 13F securities.
On January 19, BofA analyst Justin Post raised the price target on Alphabet Inc. (NASDAQ:GOOG) to $3,470 from $3,210 and kept a Buy rating on the shares. The analyst expects deceleration in 2022 versus the 41% estimated search growth in 2021, but he thinks Google is still early in its application of artificial intelligence and machine learning technology across its ad stack.
Hedge funds in the third quarter of 2021 had a bullish sentiment on Alphabet Inc. (NASDAQ:GOOG), with 156 funds holding stakes worth approximately $35 billion in the tech giant. TCI Fund Management is the leading stakeholder of the company, owning a $7.8 billion position.
Here is what Oakmark Funds’ Bill Nygren Commentary has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2021 investor letter:
“For Alphabet, we add back its research spending on Waymo and “other bets” and add an asset for the value of those money-losing ventures. We also value cash separate from the business because if you valued cash at a normal P/E today, you’d be valuing it at pennies on the dollar. When we make our adjustments to Alphabet’s financials, we own its wonderful search business at less than the S&P multiple, which we consider to be a bargain.”
2. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Omega Advisors’ Stake Value: $53,891,000
Percentage of Omega Advisors’ 13F Portfolio: 2.85%
Number of Hedge Fund Holders: 56
Gain in 2021: 73.84%
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is a company offering modular space and portable storage solutions in the United States, Canada, Mexico, and the United Kingdom to multiple commercial and industrial sectors.
Billionaire Leon Cooperman purchased a stake in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) in the fourth quarter of 2020, buying 650,085 shares. Over time, he has increased his position in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and as of Q3 2021, Cooperman owns 1.69 million shares worth $53.8 million. The stock accounts for 2.85% of Cooperman’s Q3 13F portfolio.
Oppenheimer analyst Scott Schneeberger raised the price target on WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) to $42 from $36 and kept an Outperform rating on the shares on November 9. The analyst noted that the company held ambitious yet achievable objectives for the coming 3 to 5 years.
According to Insider Monkey’s Q3 database, 56 hedge funds were long WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), with stakes totaling approximately $2 billion. This is compared to 52 funds holding stakes worth $1.39 billion in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) in the preceding quarter.
Here is what Bernzott Capital Advisors has to say about WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) in its Q3 2021 investor letter:
“WillScot Mobile Mini (WSC): This modular and portable storage space company posted strong earnings with attractive growth in rental rates as it increases penetration of value-added products and services such as units equipped with HVAC, ethernet ports, and plumbing. The company is executing well on its Mobile Mini merger. Cash flow generation continues to be a notable positive.”
1. Devon Energy Corporation (NYSE:DVN)
Omega Advisors’ Stake Value: $110,794,000
Percentage of Omega Advisors’ 13F Portfolio: 5.87%
Number of Hedge Fund Holders: 48
Gain in 2021: 170.73%
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based energy company that specializes in the exploration and production of oil, natural gas, and natural gas liquids in the United States. Devon Energy Corporation (NYSE:DVN) is the top performing stock pick of Leon Cooperman from the third quarter of 2021, with the shares gaining approximately 171% in 2021.
Cooperman acquired a position in Devon Energy Corporation (NYSE:DVN) in Q1 2021, buying 3.12 million shares of the company. As of the third quarter, Cooperman’s stake in Devon Energy Corporation (NYSE:DVN) is valued at $110.7 million, representing 5.87% of the billionaire’s Q3 securities.
On December 8, Devon Energy Corporation (NYSE:DVN) declared a $0.84 per share quarterly dividend, which is a 71.4% increase from its prior dividend of $0.49. The dividend was paid on December 30, to shareholders of record on December 10.
Goldman Sachs analyst Neil Mehta on January 22 downgraded Devon Energy Corporation (NYSE:DVN) to Neutral from Buy with a price target of $52, up from $46. The analyst cites valuation for the downgrade, following the stock’s relative and absolute outperformance in 2021. He now sees limited upside to Devon Energy Corporation (NYSE:DVN) shares relative to peers.
Among the hedge funds tracked by Insider Monkey in Q3 2021, Rajiv Jain’s GQG Partners is the biggest Devon Energy Corporation (NYSE:DVN) shareholder, with 13.9 million shares worth approximately $494 million. Overall, 48 hedge funds were long Devon Energy Corporation (NYSE:DVN) in the third quarter.
Here is what GoodHaven Capital Management has to say about Devon Energy Corporation (NYSE:DVN) in their Q4 2020 investor letter:
“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”
You can also take a look at Warren Buffett’s 5 Worst Performing Stock Picks From 2021 and 10 Jim Cramer Stocks to Buy in January.
