Billionaire Leon Cooperman Has 25% of His $2.4 Billion Portfolio in Just 3 Stocks

While he may not be as well known among investors as some of his peers, Leon Cooperman is a huge presence on Wall Street. The billionaire investor started from humble beginnings as the son of a Bronx plumber who attended public schools, graduated from Hunter College at New York City University and then earned an MBA from Columbia University.

He worked on the development of Wall Street Goldman Sachs (NYSE:GS) asset management business before founding Omega Advisors hedge fund in 1991. He closed the fund at the end of 2018 and retired, transferring much of his investments to a family office that invests on behalf of Cooperman, his family and others.

However, Omega Advisors had a illustrious run over those 27 yearsgenerating compound annual returns of 12.4% after fees, compared to returns of 9.5% for S&P 500including reinvested dividends.

Its portfolio now holds 52 stocks and has about $2.4 billion in assets under management. However, of these stocks, only three companies account for a quarter of the total. Let’s take a closer look at this trio to see if they’re right for your portfolio too.

Key points about this article:

• Leon Cooperman has a long career on Wall Street and has been able to consistently generate astounding returns in the market for nearly three decades.
• While the billionaire has shut down his hedge fund and now runs a family office that manages his own investments with $2.4 billion in assets, there are three strategic areas Cooperman is putting his money to work.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

Mr. Cooper Group (COOP)

Housing development under construction

I can’t help but believe that Cooperman was drawn to the mortgage servicer Mr. Cooper Group (NASDAQ:COOP) at least in part because of its name. But in reality, it is the largest provider of mortgage loans in the US, with 5.3 million customers. Mr. Cooper will add another 1.3 million customers when he ends upon its purchase of the mortgage services business a New York Community Bancorp(NYSE:NYCB) Flagstar Bank in the fourth quarter.

Mr Cooper’s shares rose 78% from a 52-week low as interest rate cut speculation grew and the mortgage business improved. Now that the Federal Reserve has initiated a jumbo rate cut of 0.5%, it could trigger another housing boom. While demand for homes hasn’t fallen even in the high-rate environment, lower rates could draw more buyers into the market.

The billionaire investor owns 2.86 million of Mr. Cooper’s shares, worth a total of $232 million. That makes Cooperman the third largest investor in the rear company BlackRock (NYSE:BLK) and Capital State Street (NYSE:STT).

The mortgage servicer represents 9.8% of its portfolio. It is also one of his longest-running acts as himself started buying shares in 2018 as he transferred to a family office. Cooperman has an average purchase price of just over $12 per share, giving it implied returns of 656%. At a valuation of just 7 times estimated earnings, it looks like there’s plenty of room for COOP stock to grow.

Energy Transfer (ET)

Oil pipeline to the east

Midstream operator Energy transfer (NYSE:ET) is the second largest position in Cooperman’s portfolio, accounting for 8.4% of the total. It is one of the largest owners of pipelines and storage facilities in the country, and easily move the supply of oil and gas coast to coast and border to border.

Energy Transfer owns more than 130,000 miles of pipeline and associated energy infrastructure in 44 states and has assets in all major producing basins. Also owns about 21% of Sunoco(NYSE:SUN) shares outstanding, as well as general partner interests and incentive distribution rights.

The only problem for small investors is that it is organized as a master limited partnership (MLP), which could introduce complex tax issues. Just make sure you buy its shares with the right investment vehicle.

Cooperman owns 12.3 million ET shares worth $199 million. While that makes the billionaire a significant owner of the midstream operator, this time it’s not enough to place him even in the top 20 investors.

Vertiv Holdings (VRT)

Woman and man checking data center network

Cooperman’s investment in Vertiv Holdings (NYSE:VRT) shows that the billionaire is staying on top of today’s top trends. The company provides cooling technologies to data centers that consume tons of electricity due to the demands of artificial intelligence. Vertiv Coolant Distribution Units manage the flow of coolant through a data center while also providing cooling technology right on the chip. By mitigating their heat-generating properties, Vertiv is able to ensure optimal performance.

It’s a fast-growing market that’s expanding at double-digit rates and has only a relatively small handful of companies capable of solving it. Vertiv is the leading player in the space, and with data centers expected to grow at a compound annual growth rate of 24% over the next three years, according to Goldman Sachs, it should see tremendous growth.

Vertiv reported 53% organic growth in orders in the second quarter, which came on top of 60% growth in the first quarter. Cooperman owns 2.1 million shares of VRT valued at $182 million, which puts the data center infrastructure company at 7.7% of the billionaire investor’s portfolio.

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