We recently compiled a list of the Billionaire Lee Cooperman’s Top 15 Long-Term Stock Picks. In this article, we are going to take a look at where Motorola Solutions, Inc. (NYSE:MSI) stands against Lee Cooperman’s other long-term stock picks.
Leon Cooperman is a highly respected figure in the investment world, known for his acumen, philanthropy, and candid commentary on markets and economics. As the founder of Omega Advisors, Cooperman built a reputation as one of Wall Street’s most successful hedge fund managers. Leon Cooperman was born in New York in 1943 to working-class immigrant parents. His father was a plumber, and his mother was a homemaker. Cooperman earned his undergraduate degree from Hunter College in 1964 and later pursued an MBA at Columbia Business School. Cooperman began his professional journey at Goldman Sachs, where he worked for 25 years.
He joined the firm as an analyst and rose through the ranks to lead the Asset Management division. His tenure at Goldman Sachs was marked by significant achievements, including his role in expanding the firm’s institutional investment management services. In 1991, Cooperman left Goldman Sachs to establish Omega Advisors, a hedge fund specializing in value-oriented investing. He built the firm on principles of thorough research, disciplined risk management, and a long-term investment horizon. Under his leadership, Omega Advisors delivered strong returns, earning a reputation as one of the most successful hedge funds in the industry.
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At its height, Omega Advisors managed approximately $10 billion in assets, attracting institutional investors and high-net-worth individuals. In 2018, when Cooperman transitioned the firm into a family office, Omega Advisors had around $3.6 billion in AUM. Over its 27 years as a hedge fund, Omega Advisors achieved annualized returns of approximately 12%, outperforming many of its peers and major indices during key periods. During bullish market cycles, Cooperman’s ability to identify undervalued stocks enabled the fund to outperform benchmarks like the S&P 500, which has an average historical return of around 10% annually. For instance, in the late 1990s and early 2000s, Cooperman’s investments in financials, industrials, and energy sectors delivered double-digit gains.
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For this article, we selected stocks by combing through the 13F portfolio of Omega Advisors at the end of the third quarter of 2024. Only the companies that have been in the 13F portfolio of the fund consistently for the past three years were selected. These stocks are also popular among other hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up view of a mission-critical communication device in action.
Motorola Solutions, Inc. (NYSE:MSI)
Number of Hedge Fund Holders: 48
Omega Advisors’ Stake: $44.9 million
Motorola Solutions, Inc. (NYSE:MSI) is a leader in mission-critical communications products, solutions & services for communities & businesses. The following factors make this company stand out as a prime investment opportunity. Firstly, the improved finances, as illustrated in the report for the third quarter of 2024, paint a promising picture. For instance, as illustrated in the report, the company paid $164 million in cash dividends, repurchased $31 million of common stock and incurred $57 million of capital expenditures. Operating cash flow was $759 million, compared to $714 million in the year-ago quarter, and free cash flow was $702 million, up from $649 million in the year-ago quarter. This shows that both the operating cash flow and free cash flow for the quarter increased primarily due to higher earnings in the current year, net of non-cash charges. Secondly, Motorola and Google Cloud announced to bring generative AI to Motorola phones, including the brand-new series of Razr smartphones, enhancing user experience. Moreover, Motorola has announced the opening of a Research and Development Centre in Ho Chi Minh City, Vietnam, to advance data analytics and AI-enabled technologies.
Overall MSI ranks 13th on our list of Lee Cooperman’s top long-term stock picks. While we acknowledge the potential of MSI as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than MSI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
