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Bargain Hunting with Guru Leon Cooperman, Lowest PE Stocks

October 27, 2013 | About:
Sally Jones

Sally Jones

49 followers
“The stock market is not overvalued right now, but it's no bargain anymore,” the legendary Guru Leon Cooperman of Omega Advisors told CNBC earlier this month. In a market that he feels is reasonably valued, Cooperman said, “…I have to kind of work hard to find stocks and macro themes.”From a bargain hunter’s perspective, here are three of Leon Cooperman’s lowest P/E/stocks in review. These companies also have high yields, starting with Two Harbors Investment Corp. (TWO), showing a dividend yield of more than 15%.

Two Harbors Investment Corp. (TWO): P/E 4.40

Current Shares: 100,000

Value: $1.02 million

Down 13% over 12 months, Two Harbors Investment Corp. has a market cap of $3.55 billion; its shares were traded at around $9.71 with a P/B ratio of 0.90. The dividend yield is 15.04%.

Incorporated in 2009, Two Harbors Investment Corp. is engaged in investing in, financing and managing residential mortgage-backed securities and related investments. The company deploys moderate leverage as part of its investment strategy through short-term borrowings structured as repurchase agreements. Two Harbors acquires and manages a portfolio of RMBS and related investments, focusing on security selection and the relative value of various sectors within the mortgage market.

Guru Action: As of June 30, 2013, Leon Cooperman took a loss of 15.3% on his holding of 100,000 shares bought at an average price of $11.47 per share. He first bought 100,000 shares in the second quarter of 2012 at an average price of $9.59 per share for a gain of 1.3%.

Between the two quarters of holding, he averaged a gain of 1% on 100,000 shares bought at an average price of $9.59 per share.

Track historical pricing, revenue and net income since 2007:

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Newcastle Investment Corporation (NCT): P/E 2.60

Current Shares: 7,120,823

Value: $37.2 million

Up 44% over 12 months, Newcastle Investment Corp. has a market cap of $1.72 billion; its shares were traded at around $5.85 with a P/B ratio of 2.20. The dividend yield is 12.14%.

Formed in June 2002, Newcastle Investment Corp. is a subsidiary of Newcastle Investment Holdings Corp. The company is a real estate investment and finance company, investing and managing a portfolio of real estate securities, loans, excess mortgage servicing rights and other real estate related assets.

Guru Action: As of June 30, 2013, Leon Cooperman increased his position by 75.27%, buying 3,058,023 shares at an average price of $5.29 for a gain of 10.2%.

In three quarters of trading, Cooperman averaged a gain of 16% on 7,120,823 shares bought at an average price of $5.03 per share. His highest gain of 88.7% was made on a new buy of 300,000 shares at an average price of $3.09 per share in the second quarter of 2012.

Track historical pricing, revenue and net income since 2002:

1382820794965.png

KKR Financial Holdings LLC (KFN): P/E 5.40

Current Shares: 14,762,185

Value: $155 million

Down 1% over 12 months, KKR Financial Holdings LLC has a market cap of $2.06 billion; its shares were traded at around $10.09 with a P/B ratio of 0.80. The dividend yield is 8.33%.

KKR Financial is a specialty finance company with expertise in a range of asset classes. The company's core business strategy is to leverage the proprietary resources of its manager with the objective of generating both current income and capital appreciation by deploying capital to its strategies, which include bank loans and high yield securities, natural resources, special situations, mezzanine, commercial real estate and private equity.

Guru Action: As of June 30, 2013, Leon Cooperman increased his position by 6.96%, buying 961,175 shares at an average price of $10.68 per share for a loss of 5.5%.

In a remarkable five-year history, he has averaged a gain of 140% on 13,224,658 shares bought at an average price of $4.20 per share. On shares sold, he averaged a gain of 13% on 1,629,857 shares sold at an average price of $8.91 per share.

Track historical pricing, revenue and net income since 2005:

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The current portfolio of Omega Advisors, led by Leon Cooperman, lists 74 stocks, 10 of them new, and a total value at $6.52 billion. The quarter-over-quarter turnover is 13%. The portfolio is weighted with top three sectors: financial services at 25.8%, energy at 20.5% and communication services at 12.6%. Guru Cooperman has averaged a return of 12.75% over 12 months, according to the GuruFocus Score Board of Gurus.

Leon Cooperman’s hedge fund, Omega Advisors, has around $9.5 billion in assets under management as of October 2013. As founder and chairman of Omega Advisors, Guru Cooperman is focused on value investing. The son of a plumber, Cooperman now has a net worth of around $3 billion, reported by Forbes.

Here is the complete portfolio of Leon Cooperman.



Also check out:

1. Leon Cooperman's Undervalued Stocks

2. Leon Cooperman's Top Growth Companies

3. Leon Cooperman's High Yield stocks

4. Stocks that Leon Cooperman keeps buying

Use the GuruFocus Value Screen to find 52-Week Lows and discover potentially deep value stocks held by billionaire Guru investors.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.5/5 (2 votes)

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