A Look at Leon Cooperman's Top Four Stocks

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Jan 23, 2015
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Of the 92 stocks Omega Advisors founder Leon Cooperman (Trades, Portfolio) has in his portfolio, 21% of the stocks come from the financial services sector. Next is the energy sector, making up 19.1% of his portfolio and last is the consumer cyclical sector, which makes up 12% of his overall portfolio.

"Buying something at the right price is half the game," Cooperman said during an inverview at the CNBC/Institutional Investor Delivering Alpha conference.This value investor looks at buying stocks that have more growth.

Four of the most heavily weighted stocks in Cooperman's portfolio include: American International Group Inc. (AIG, Financial), Citigroup Inc (C, Financial), Sirius XM Holdings Inc (SIRI, Financial) and SandRidge Energy Inc (SD, Financial).

Cooperman owns a total of 5,247,100 shares of AIG, valued at $283.4 million. This stock has a 4.2% portfolio weight.

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Cooperman has been adding to his position in AIG since the second quarter of 2012 and has purchased a total of 8,094,100 shares at an average price of $31.27/share, resulting in a 63% overall gain. 2,847,000 shares were sold at an average price of $44.12/share, resulting in a 15% overall gain.

AIG is part of the insurance industry and was founded in 1919 and provides property casualty insurance, life insurance, retirement products, mortgage insurance along with other financial services to customers in over 130 different countries, including the U.S. This stock is currently $52.28/share.

"We think over the next two or three years, there's a strong argument to be made that AIG will get to at least a 10% return on equity, which would imply earnings of well over $6 a share because book value will be growing. We think a 10% ROE ought to command one times book value at a minimum. So we could see AIG going up 25% over the next 12-18 months," Cooperman said about the stock during an interview with CNBC's Halftime Report, where he discussed some of his favorite stocks.

Cooperman currently owns 5,160,550 shares of Citigroup, valued at $267.4 million and has a 3.9% portfolio weight.

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Over the past five years, Cooperman has been increasing his position in Citigroup and has purchased a total of 6,671,300 shares at an average price of $42.79/share. He sold 1,510,750 shares at an average price of $32.58/share and resulted in a 47% gain.

Citigroup, which is part of the banking industry, was founded in 1998 and provides financial services to customers, including consumer banking, credit cards, corporate and investment banking, securities brokerage and wealth management. This stock is currently $49.11/share.

According to Cooperman, banks represent "attractive investments" and will "sell at ten times."

Sirius XM Holding Inc has a 3% portfolio weight, with 57,645,094 shares valued at $201.8 million.

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Over the past five years, Cooperman increased his position in SIRI and has purchased 86,074,428 shares at an average price of $2.40/share, which resulted in an overall 50% gain. He sold 28,429,334 shares at an average price of $3.46/share. As of today, this stock is $3.60/share.

SIRI, part of the entertainment industry, was incorporated in 2013 as a satellite radio company that broadcasts sports, music, weather, traffic, talk and entertainment channels. Listeners must pay a subscription fee.

"We think downside is limited and see significant potential in the years ahead for SIRI , with a price objective of $5 using a low-teen multiple of cash flow," Cooperman has said about investing in SIRI.

SandRidge Energy has a 2.9% portfolio weight, with 45,477,334 shares valued at $195.1 million.

Cooperman discussed why SandRidge has become a smaller part of his portfolio on CNBC last month, "If present prices persisted for several years, SandRidge's survival would be an issue. So, I have not added to it, it's become a smaller part of my portfolio because of the big price decline, but we still own it."

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SandRidge is a natural gas and oil company.

Since the fourth quarter of 2012, Cooperman has purchased 47,751,363 shares of SD at an average price of $6.13/share, resulting in an 80% loss. 2,274,029 shares were sold at an average price of $6.07/share and resulted in an 80% loss as well. The stock's price as of today is $1.23/share.

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