In a CNBC interview on Wednesday, Leon Cooperman (Trades, Portfolio) of Omega Advisors provided his insight on the market and some of the stocks he is currently holding in his portfolio.
Below is a list of Cooperman’s top holdings as of June 30:
In the current market environment Cooperman has reduced his exposure to equities and reports that financials could be a leading sector in the near term as rates rise. The higher trending credit rates and uncertainty in corporate profit improvement are leading factors slowing the equity market’s momentum. On Wednesday Cooperman reported that he finds the stock market is "fairly but fully valued."
His perspective on the broad market has caused him to reduce exposure to equities to approximately 65% in comparison to a standard 85% to 90%. Cooperman has invested those assets in the credit market with approximately 10% in high-yield bonds that have been leading market returns for yield investors. Cooperman reports an 8% year-to-date gain in high-yield bond investments and through Aug. 31 the Barclays Global High Yield Bond Index has a return of 13.61%.
Cooperman has a bearish outlook for the equity market with an expectation of only 5% to 6% return for the near term. His bearish outlook on equities is also reflected in his high allocation to dividend-paying stocks. As of June 30 a large portion of the portfolio was invested in stocks with a dividend yield greater than 6%.
While bullish on financial stocks with revenue highly correlated to interest rate increases, Cooperman reported that he has sold out of Citigroup (C, Financial). His leading stock investments in the banking sector include the following:
Cooperman’s discussion Wednesday with CNBC provides further detail on his market perspective and investment portfolio.
Disclosure: I do not own any stocks included in this article.
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