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Leon Cooperman Buys 2 Real Estate-Related Stocks

February 08, 2013 | About:
Holly LaFon

Holly LaFon

277 followers
Leon Cooperman, chairman and CEO of New York-based Omega Advisors, has purchased shares of two new companies: Arbor Realty Trust (ABR) and Home Loan Servicing Solutions Ltd. (HLSS), according to GuruFocus Real Time Picks.

Cooperman took an 8.23% stake in Arbor Realty Trust, equal to 2,572,136 shares, at an average purchase price of $7.14, in a transaction that took place on Feb. 8.

New York-based Arbor Realty Trust focuses on a variety of real estate-related investments, from mortgage-based loans to equity investments. In the last year, its market value has increased by nearly 57%.

The trust released its third quarter results on Nov. 2, in which it reported net income of $2.1 million, or $0.07 per share, compared to a net loss of $2.4 million, or $0.10 per share, the previous year. It also had interest income of $20.03 million, compared to $18.52 million the previous year.

The trust was also the first to bring a collateralized debt obligation (CDO), a risky asset that played a key role in the global financial meltdown of 2007, to market in 2013, according to Reuters. It is offering $260 million worth of the securities.

Arbor Realty Trust, a real estate investment trust (REIT), pays a dividend of $0.11 quarterly. Its P/E stands at 2.1, P/B at 0.9 and P/S of 1.8.

His second buy was a 2.03% stake in Home Loan Servicing Solutions Ltd. on Dec. 31. He purchased 620,000 shares for $18.78 on average. The stock, up 17% since then, is trading for $22 per share on Friday afternoon.

Home Loan Servicing Solutions, based in the Cayman Islands, owns non-agency mortgage servicing assets collateralized by residential real estate and has been in operation for about a year. In its fourth quarter results released Feb. 7, the company reported $14.3 million in net income, or $0.44 per ordinary share, in the fourth quarter, compared to a loss of $191 million, or a loss of $9.55 per ordinary share, in the fourth quarter of 2011. Fourth quarter revenue totaled $27.64 million.

The company has paid a dividend since its first quarter of operations. On Feb. 7, its board declared a monthly dividend of $0.13 per ordinary share for February and March 2013.

"Reflecting on our first year of operations, I believe that we have delivered on our plan to provide our shareholders with earnings and dividends that are particularly attractive given the stability and low risk of our assets which the ABS markets are starting to reward," said Home Loan Servicing Solutions Chairman William Erbey.

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