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James Li
James Li
Articles (328)  | Author's Website |

Leon Cooperman Starts 4 Positions in 3rd Quarter

Hedge fund guru reports quarterly portfolio

November 14, 2017 | About:

Omega Advisors fund manager Leon Cooperman (Trades, Portfolio) combines his macro view and fundamental valuation in his investing strategy. During the third quarter, Cooperman initiated positions in DowDuPont Inc. (NYSE:DWDP), Aetna Inc. (NYSE:AET), Expedia Inc. (NASDAQ:EXPE) and Adobe Systems Inc. (NASDAQ:ADBE).

DowDuPont

Cooperman added 1,367,400 shares of DowDuPont, a diversified global chemicals and materials company. The stock averaged $65.88 during the quarter and represents 3.68% of the guru’s portfolio.

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DowDuPont CEO Ed Breen said the company delivered good revenue and earnings growth during the quarter, “a strong start for [the] newly-formed company.” Breen highlighted several initiatives, including a $3 billion cost synergy commitment and preparations to create three focused growth companies in agriculture, materials science and specialty products.

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Aetna

Cooperman added 179,700 shares of Aetna for an average price of $156.19 per share. The guru increased his portfolio 1.11% with this transaction.

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Aetna CEO Mark Bertolini said the company had the “highest percentage of members in plans rated four stars or higher” for each of the past three years. The strong quarterly results contributed to good operating margins, which outperform 65% of global competitors.

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Aetna Chief Financial Officer Shawn Guertin said management is “once again increasing [the company’s] full year earnings projections” to reflect the strong year-to-date operating results. Management also discussed key opportunities in the following year, including growth in Medical Advantage products for both groups and individuals.

Expedia

Cooperman added 195,497 shares of Expedia, a major online travel company. Expedia, which represents 1.09% of the guru’s portfolio, averaged $148.22 during the quarter.

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Expedia said total gross bookings for the quarter increased 11%, contributing to a 15% increase in revenues from the prior-year quarter. Primary growth drivers included growth in Brand Expedia, HomeAway, Hotels.com, Expedia Affiliated Network and Trivago. Expedia’s three-year revenue growth rate outperforms 87% of global travel and leisure companies.

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Although the company has good revenue growth, Expedia’s profitability ranks just 7 out of 10. The company’s margins and returns are near a 10-year high despite underperforming 57% of global competitors.

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Lee Ainslie (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio) also established positions in Expedia during the quarter.

Adobe Systems

Cooperman added 145,000 shares of Adobe for an average price of $149.16 per share. With this transaction, the guru increased his portfolio 0.84%.

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Adobe CEO Shantanu Narayen said the company “delivered another record quarter with stellar year-over-year revenue growth of 26%.” The company’s profitability ranks a solid 8, driven by strong profit margins and an excellent Piotroski F-score of 8.

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Ainslie, Julian Robertson (Trades, Portfolio) and Jim Simons (Trades, Portfolio) boosted their positions in Adobe as the company offers strong growth potential.

Disclosure: I do not have positions in the stocks mentioned.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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