Leon Cooperman (Trades, Portfolio) is the founder and chairman of Omega Advisors, a hedge fund that manages about $6 billion in assets. During the second quarter, he added 33 new stocks to his portfolio.
Cooperman combines a macro view and fundamental valuation into his investing approach. Two of his top five purchases during the quarter were tech companies, while he sold out five of his ETF holdings. Tellingly, Cooperman initiated a new holding in iShares Dow Jones US Home Const. ETF (ITB, Financial), which may reflect his confidence in the improving U.S. housing market.
Cooperman’s largest purchase was 2,626,900 shares of Springleaf Holdings for an average price of $48.52 per share. Springleaf provides non-revolving personal loans with a fixed rate to clients.
The stock rose 38% over the past year, closing at $45.43 on Aug. 19. The company is currently undervalued according to the Peter Lynch earnings line, which is at $56.80 based on second quarter earnings.
After three years of losses, Springleaf posted earnings per share of $4.38 in 2014. Net income was also reported at $505 million, up from net loss of $19 million the year before.
Cooperman bought 103,415 shares of travel booking website Priceline, which traded for an average of $1192.84 during the quarter. The stock has a 1.9% portfolio weighting.
The stock declined marginally by 3% over the past year and closed at $1291.35 on Aug. 19. The current P/E ratio is 27.29. GuruFocus rates the company’s business predictability as 4.5 out of 5 stars, with an annual revenue growth rate of 27.7% over the past five years.
EPS growth has been steady over the years, recording at $45.67 in 2014.
He purchased 213,659 shares of Google for an average of $549.37 per share, with a 1.84% portfolio weighting. Cooperman had closed out a previous position in Google back in Q3 2013.
The price of the stock increased 12% over the past year, closing at $679.48 on Aug. 20 with a P/E of 32.15. The annual revenue growth rate over the last five years was 26.1%, while EBITDA grew 19.2%.
It’s no secret that Google is sitting on large amounts of cash, which amounted to $80.6 billion in current assets at the end of 2014. Some shareholders and analysts have pointed to this cash pile as a reason why Google should pay a dividend.
Cooperman also bought 1,759,300 shares of Gulfport Energy at an average price of $45.84 per share. Gulfport is an oil and natural gas exploration and production company with properties in the Utica Shale and along the Louisiana Gulf Coast.
The stock dropped 41% over the past year, closing at $33.76 on Aug. 20, with a current P/E of 24.99. EPS in 2014 was $2.88, up from $1.97 the year before. Net income also rose to $247.4 million, an improvement from $153.2 million in 2013.
Looking at the balance sheet, Gulfport’s current ratio is currently under 1, which indicates it cannot cover its short-term debts.
Cooperman’s fifth-largest purchase was 3,442,490 shares of MGM Resorts for an average of $20.31 per share. The company now has a 1% portfolio weighting.
MGM is a hospitality holding company with a portfolio of destination resort brands. The stock price declined 18% over the past year to close at $21.28 on Aug. 20. The forward P/E is 42.92.
MGM recorded loss per share of $0.31 in 2014, up from loss per share of $0.35 the year before.