Cooperman is the founder and chairman of the Omega Advisors Family Office. The firm's investing strategy is a combination of macro views and fundamental valuation. In 2018, Cooperman converted his hedge fund to a family office, citing in a letter that he did not wish to chase the S&P 500 for the rest of his life.
Based on its investing strategy, the firm's top new buys for the quarter were Devon Energy Corp. (DVN, Financial), Alibaba Group Holding Ltd. (BABA, Financial) and International Flavors & Fragrances Inc. (IFF, Financial).
The firm obtained a 3,120,069-share stake in Devon Energy (DVN, Financial) following its acquisition of one of Omega Advisors' previously existing holdings, WPX Energy Inc. Devon Energy now represents 4.25% of the equity portfolio. During the quarter, shares traded for an average price of $20.57.
Both Devon Energy and WPX Energy are Oklahoma-based oil and gas companies. Thus, they referred to the acquisition as a "merger of equals" that "builds a dominant position in the Delaware Basin and accelerates our cash-return business model."
On May 19, shares of Devon Energy traded around $25.28 for a market cap of $17.11 billion. According to the GuruFocus Value chart, the stock is significantly overvalued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 4 out of 10. The Altman Z-Score of 1.04 suggests liquidity issues, though the Piotroski F-Score of 4 out of 9 indicates financial stability. The operating margin is 12.09% and the net margin is 9.82%, both down slightly over the past couple of years but representing improvements from 2020.
Alibaba Group Holding
The firm took a new position of 85,000 shares in Alibaba Group Holding (BABA, Financial), which had a 1.20% impact on the equity portfolio. Shares traded for an average price of $245.98 during the quarter.
Alibaba is a Chinese multinational conglomerate with holdings in e-commerce, retail, internet and technology assets, among many others. By volume, Alibaba is the largest e-commerce company in the world, with millions of merchants and hundreds of millions of users.
On May 19, shares of Alibaba traded around $212.54 for a market cap of $576.51 billion and a price-earnings ratio of 26.25. According to the GF Value chart, the stock is significantly undervalued.
The company has a financial strength rating of 8 out of 10 and a profitability rating of 8 out of 10. The Piotroski F-Score of 5 out of 9 and Altman Z-Score of 5.06 both suggest a fortress-like balance sheet. The three-year revenue growth rate is 38.2%, while the three-year Ebitda growth rate is 10.1%.
International Flavors & Fragrances
The firm also established a 135,000-share investment in International Flavors & Fragrances (IFF, Financial), impacting the equity portfolio by 1.18%. During the quarter, shares traded for an average price of $129.42.
International Flavors & Fragrances is a New-York based company that produces a variety of flavors, fragrances, cosmetic actives and other chemicals for sale around the world. It has facilities in more than 44 countries.
On May 19, shares of International Flavors & Fragrances traded around $141.92 for a market cap of $35.33 billion and a price-earnings ratio of 76.73. According to the GF Value chart, the stock is fairly valued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 7 out of 10. While the cash-debt ratio of 0.07 is underperforming 91% of industry peers, the Piotroski F-Score of 4 out of 9 indicates the company is financially stable. The return on invested capital has dropped below the weighted average cost of capital in recent years, indicating struggles with growing in a profitable way.
As of the quarter's end, the firm held shares in 55 stocks valued at a total of $1.60 billion. During the quarter, it established 17 new positions, sold out of eight holdings and added to or reduced several other positions for a turnover of 13%.
The top holdings were Mr. Cooper Group Inc. (COOP, Financial) with 9.21% of the equity portfolio, Alphabet Inc. (GOOGL, Financial) with 7.72% and Fiserv Inc. (FISV, Financial) with 7.65%. In terms of sector weighting, the firm was most invested in financial services, basic materials and technology.
Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates reflect only common stock positions as per the regulatory filings for the quarter in question and may not include changes made after the quarter ended.
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