Billionaire Lee Cooperman’s 10 Stock Picks with Huge Upside Potential
In this article, we discuss billionaire Lee Cooperman's 10 stock picks with huge upside potential. To skip the details of Mr. Cooperman’s life and investment strategy, go directly to Billionaire Lee Cooperman's 5 Stock Picks with Huge Upside Potential.
Leon Cooperman is the true definition of a “self-made” person. He was born in the South Bronx to a couple of Polish immigrants, and his father worked as a plumber. Today, Leon Cooperman is one of the richest people in the world, with a net worth of $2.8 billion. Cooperman is an investor, hedge fund manager, and philanthropist. His life story has recently been released in the form of a memoir, From The Bronx To Wall Street: My Fifty Years in Finance and Philanthropy.
Leon Cooperman became the first man in his family to graduate college as he received his undergraduate degree from Hunter College and went on to receive his MBA from Columbia Business School in 1967. He joined Goldman Sachs shortly after his MBA, and by 1989, he was the chairman and chief executive officer of Goldman Sachs Asset Management.
Mr. Cooperman established Omega Advisors in 1991 and managed it till 2018 before converting it into a family office. Between 1991 and 2018, Omega had average annualized returns of 12.5%. Leon Cooperman is a value investing legend along with the likes of Warren Buffett and Seth Klarman. The most basic definition of value investing is that it is an investment strategy that involves picking undervalued stocks that are expected to grow steadily over a long period of time. A value investor invests in stocks that they think are underappreciated and believe them to be trading below their intrinsic or book value.
While a few other hedge fund billionaires, such as Ken Fisher, have a positive outlook on the economy, Leon Cooperman doesn’t share the same sentiment. In an October interview with CNBC, he said:
“I think if you recall about a year ago on your program in the morning, I said that I felt like the Pharaoh. And the Pharaoh had a dream. A dream was interpreted by Joseph. And that dream was in the Bible and he said he would expect his seven lean years following seven fat years. So I’m of the view that we borrow from the future with very profligate fiscal policy. We’re running up debt in this country, which is borrowed from the future and have a very conservative view. You know, and, you know, in 2020, national debt was $20 trillion. And I say in 2017, it was 20 trillion, and currently running around 33 trillion. That’s a growth rate – for the economy. And either it doesn’t matter or it matters. I think it matters and ultimately, we will have a crisis in public sector finance, and the market is not discounting a crisis. But you know, overall, I expect very little from the market.”
When asked about advice on investing in the current economic environment, he said that he prefers cheap stocks followed by short and dated treasuries in a one to two-year period. Leon Cooperman’s least favorite investments at the moment are long-term bonds, as he thinks that they don’t make sense in the current global conditions.
Leon Cooperman’s Q3 Bets
In the third quarter, Cooperman’s 13F portfolio had investments in all sectors of the market. However, a major part of his portfolio consists of healthcare, industrials, and communication services stocks. Leon Cooperman’s 13F portfolio was valued at over $1.9 billion in Q3, up from $1.84 billion in the previous quarter. He initiated new positions at Manchester United plc (NYSE:MANU) and Madison Square Garden Sports Corp. (NYSE:MSGS) and sold out of Warner Bros. Discovery, Inc. (NASDAQ:WBD) and Chimera Investment Corporation (NYSE:CIM). Furthermore, Mr. Cooperman increased holdings in 8 stocks and reduced investments in 5.
Lee Cooperman’s top three picks are Energy Transfer LP (NYSE:ET), Mr. Cooper Group Inc. (NASDAQ:COOP), and Apollo Global Management, Inc. (NYSE:APO). This article discusses the billionaire Lee Cooperman’s stock picks with huge upside potential, which include Energy Transfer LP (NYSE:ET), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and Devon Energy Corporation (NYSE:DVN). You can also check out 10 Stocks Billionaire Leon Cooperman Just Bought and Sold and Billionaire Leon Cooperman’s Long-Term Stock Picks.
Leon Cooperman of Omega Advisors
Our Methodology
For this article, we checked the average analyst price target of all the stocks in billionaire Lee Cooperman’s third-quarter 13F portfolio on TipRanks. Next, we selected 10 stocks with the highest average analyst price target upside as of December 1 market close. We only chose the stocks that were covered by at least two analysts over the last three months. The companies are listed in ascending order of Leon Cooperman’s stake value.
Billionaire Lee Cooperman's 10 Stock Picks with Huge Upside Potential
10. DiaMedica Therapeutics Inc. (NASDAQ:DMAC)
Cooperman’s Stake Value: $2.26 million
Average analyst price target: $7.00
Average analyst price target upside: 170.27%
DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is a Minnesota-based clinical-stage company that creates treatments for kidney and neurological diseases.
On November 13, DiaMedica Therapeutics Inc. (NASDAQ:DMAC) posted a Q3 GAAP EPS of -$0.12, topping the analysts’ estimates by $0.01. At the end of the quarter, the company reported $56.2 million in total cash, cash equivalents, and investments, up from $33.5 million on December 31, 2022.
In Q3, hedge fund sentiment was positive toward DiaMedica Therapeutics Inc. (NASDAQ:DMAC) as funds with investments in the company went up to 5 from 1 in the previous quarter. With 875,993 shares worth $2.26 million, Leon Cooperman’s Omega Advisors was the most significant stakeholder of the company in the quarter.
DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is one of Lee Cooperman’s top stock picks with huge potential, along with Energy Transfer LP (NYSE:ET), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and Devon Energy Corporation (NYSE:DVN).
9. SunOpta Inc. (NASDAQ:STKL)
Cooperman’s Stake Value: $16.34 million
Average analyst price target: $8.50
Average analyst price target upside: 66.02%
SunOpta Inc. (NASDAQ:STKL) is headquartered in Minnesota and is involved in the procurement, development, and distribution of organic, non-genetically modified, and specialty food products.
Over the last three months, 5 Wall Street analysts covered SunOpta Inc. (NASDAQ:STKL)’s stock, and all maintain a Buy rating on it. The average price target of $8.50 shows an upside of 66.02% as of December 1 market close.
On November 8, SunOpta Inc. (NASDAQ:STKL) reported its Q3 earnings result with a non-GAAP EPS of $0.00, which beat the estimates by $0.01. The revenue reported in the quarter was $152.5 million.
Diamond Hill Capital mentioned SunOpta Inc. (NASDAQ:STKL) in its third-quarter 2023 investor letter. Here is what it said:
“Other bottom contributors included SunOpta Inc. (NASDAQ:STKL), Rimini Street and CarMax. Shares of leading non-dairy beverages and frozen fruit offerings provider SunOpta were pressured during the quarter amid concerns about the likelihood of a slowdown in the plant-based milk category. While we are watching for signs of this, we maintain our conviction in SunOpta’s positioning relative to the trend toward plant-based beverages given its durable cost advantage in a structurally attractive industry.”
8. ADT Inc. (NYSE:ADT)
Cooperman’s Stake Value: $18.60
Average analyst price target: $10.00
Average analyst price target upside: 61.81%
ADT Inc. (NYSE:ADT), previously The ADT Corporation, is a security company that provides monitored security, interactive home, and business automation services.
On November 2, ADT Inc. (NYSE:ADT) released its Q3 earnings result with a non-GAAP EPS of $0.08, surpassing the estimates by $0.04 while the revenue was $1.2 billion.
On the same day, ADT Inc. (NYSE:ADT) declared its quarterly dividend of $0.035, which is payable by January 9 to the shareholders of record on December 14. The company has a dividend yield of 2.27%.
Ariel Investments commented on ADT Inc. (NYSE:ADT) in its second-quarter 2023 investor letter. Here is what it said:
“Lastly, shares of leading provider of automated security solutions ADT Inc. (NYSE:ADT), declined following mixed earnings results. Solid momentum in the Commercial and Consumer Security business was offset by softness in the Solar segment due to operational challenges from changing panel suppliers and weaker sales. Management quickly took action by announcing the implementation of a new dealer program and investments in infrastructure to improve cycle time. While the risk /reward remains compelling, we think patience will be required as ADT works to turnaround the solar business. Longer-term, we believe ADT’s industry leading brand and national presence, coupled with its Google and State Farm strategic partnerships, position the company to be a prime beneficiary of growing demand for smart home technologies, including fully monitored residential security.”
7. MP Materials Corp. (NYSE:MP)
Cooperman’s Stake Value: $42.86 million
Average analyst price target: $27.63
Average analyst price target upside: 63.49%
MP Materials Corp. (NYSE:MP) is a Nevada-based company that produces rare earth materials. The company owns and runs rare earth mines and operating facilities.
On November 3, Canaccord analyst George Gianarikas lowered the price target on MP Materials Corp. (NYSE:MP)’s stock to $27 from $32 and kept a Buy rating.
On November 2, MP Materials Corp. (NYSE:MP) posted its Q3 non-GAAP EPS of $0.04, which beat the estimates by $0.04. The revenue of the quarter also topped the estimates by $0.99 million at $52.52 million.
MP Materials Corp. (NYSE:MP) was mentioned in Bernzott Capital Advisors’ second-quarter 2023 investor letter. Here is what it said:
“Materials detracted from relative returns. MP Materials Corp. (NYSE:MP), a miner of rare earth minerals, fell -18.8% as weak ore prices weighed on its stock price. The long-term outlook is bright as the EV supply chain continues to expand and the company figures prominently as a domestic source of a required resource.”
6. Las Vegas Sands Corp. (NYSE:LVS)
Cooperman’s Stake Value: $45.84 million
Average analyst price target: $65.45
Average analyst price target upside: 39.85%
Las Vegas Sands Corp. (NYSE:LVS) develops and operates multiple types of properties like casinos, resorts, accommodation units, and more all over the world. The company has 5 properties in Macau and 1 in Singapore.
In Q3, the number of hedge funds with investments in Las Vegas Sands Corp. (NYSE:LVS)’s stock went down to 45 from 52 in the previous quarter. However, the total investment value increased to $1.556 billion in Q3 from nearly $1.11 billion in Q2. Fisher Asset Management increased its stake by 11% to 10.59 million shares worth $485.654 million, making it the biggest stakeholder in the company.
Energy Transfer LP (NYSE:ET), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and Devon Energy Corporation (NYSE:DVN) are some of Lee Cooperman’s top stock picks with a huge upside potential besides Las Vegas Sands Corp. (NYSE:LVS).
Baron Funds commented on Las Vegas Sands Corp. (NYSE:LVS) in its first quarter 2023 investor letter. Here is what it said:
“In the first quarter of 2023, we re-acquired shares in Macau-centric casino gaming companies Wynn Resorts, Limited and Las Vegas Sands Corp. (NYSE:LVS) with the following considerations in mind:
Since the early days of the COVID-19 pandemic in 2020 through mid-2022, the shares of Wynn and Las Vegas Sands significantly underperformed the share price performance of other U.S.-centric casino gaming and lodging companies due in large part to extremely limited travel mobility to Macau during China’s Zero-COVID policy. Just as business activity and the shares of U.S.-centric casino gaming companies rebounded sharply once people felt comfortable to travel to Las Vegas and other U.S. regional gaming markets, we have felt that Macau business activity and the shares of Macau-centric casino gaming companies would follow in the footsteps of Las Vegas-centric and other U.S. gaming and lodging companies and inflect positively once people were permitted to travel to Macau more freely.
China recently abandoned it’s Zero-COVID policy and removed travel restrictions in January 2023. We now believe both Wynn and Las Vegas Sands are well positioned to capitalize on China’s reopening.
For Las Vegas Sands, we believe additional drivers for future value creation beyond a re-emergence in Macau business activity include: (i) our expectation for a continued positive inflection in visitation and cash flow at Marina Bay Sands, Singapore; (ii) Las Vegas Sands’ plans to invest $4.5 billion in Macau and Singapore in the next 10 years; (iii) the company’s plans to pursue a New York casino and its prioritization of Texas as a new market; and (iv) the possibility that Las Vegas Sands reinstates its dividend in the next few years…” (Click here to read the full text)
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Disclosure. None. Billionaire Lee Cooperman's 10 Stock Picks with Huge Upside Potential is originally published on Insider Monkey.
