What We're Reading ~ Analytical Links 6/19/13

Timeless investing wisdom from great hedge fund managers [The Art of Value Investing]

Oakmark's Bill Nygren on Google (GOOG) [Reformed Broker]

Are higher mortgage rates bad for the economy? [ValuePlays]

Overcoming your negativity bias [Dealbook]

James Montier: doing nothing not a bad idea in this market [InvestmentNews]

Pairs trading: performance of a relative-value arbitrage rule [Turnkey Analyst]

A framework to analyze utility stocks [Graham Disciple]

3 things Bill Gates has learned from Warren Buffett [Bill Gates]

Time Warner (TWX) looks fully priced now [Barrons]

On a potential Kabel Deutschland/Liberty Global connection [FT]

On behavioral portfolio management [CFA]

Why Netflix (NFLX) is producing original content [Felix Salmon]

As interest rates rise, banks face new stress tests [Fortune]

US regulator says Deutsche Bank (DB) horribly undercapitalized [Reuters]

Barnes & Noble (BKS) keeps slashing Nook tablet prices [CNNMoney]

Google (GOOG) takes home half of worldwide mobile internet ad revenues [eMarketer]

The Physics of Wall Street: A brief history of predicting the unpredictable [Seeking Alpha]

Lee Cooperman Says Market Fairly Valued, Talks Stocks He's Been Buying (Interview)

Lee Cooperman of hedge fund firm Omega Advisors made an appearance on CNBC today to talk about what he's been buying and what his portfolio looks like.

Cooperman thinks the market is fairly valued right now and that the "Fed will have to remain friendly." He thinks the rest of the year will be determined by which valuation camp wins out.

He thinks a radical change in Fed policy or a recession would cause a drop in the market, but he's not terribly worried about either of those scenarios.

At the same time, he points out how many investors have de-risked drastically and are underinvested.  He says, "what the wise man does in the beginning, the fool does in the end."


Stocks Cooperman Likes

Cooperman mentioned Thomas H Lee Credit (TCRD), a mezzanine lender that yields over 9% and he thinks the dividend goes higher.

We recently posted up excerpts from Omega's Q1 letter if you missed it where he talks about some of his other stock picks.

He likes to buy MLP's when they're trading below net asset value and especially if he can get a decent yield.  He thinks Linn Energy (LINE) has assets worth "in the area of 40."

Cooperman has also sued Tetragon Financial and he believes management should be barred from the industry due to 6 years of bad governance in his opinion and possibly unlawful acts.  He still thinks the stock is undervalued (he owns 14 million shares of it and he started buying in 2009 back during the financial crisis).  In sum, he feels it's solely a management problem.

The Omega Advisors man also talked about Sprint (S), saying he bought it at $2 and then again at $7 and likes that there were 2 interested parties in the company (Softbank and Dish Network), but it looks like.  He said he'll tender 80% of his position, but if it trades at the right price, he'll get back into that chunk of his position.

Cooperman has owned Dish (DISH) for six years and he said it's a mature business and he thinks it'd be worth more with Sprint than without it.  He likes management there.

The hedge fund manager noted that he's "very bottom-up" and some things Omega has been buying recently include Express Scripts (ESRX), Halliburton (HAL), Transocean (RIG), Qualcomm (QCOM), Motorola Solutions (MSI). Sandridge (SD), and Chimera (CIM).


Embedded below is the video of Cooperman's 18-minute interview:



For more on this manager, check out Lee Cooperman's thesis on Covidien (COV) and Sirius XM Radio (SIRI).

Soros Fund Discloses New Position in SDL Plc

George Soros' family office Soros Fund Management has disclosed a new position in London listed SDL plc (LON:SDL).  Due to trading on June 18th, Soros Fund now own the equivalent of 3.62% of SDL's voting rights.  Approximately 35% of the stake is held via contracts for difference (CFDs).

Per Google Finance, SDL plc is "is engaged in providing global information management solutions     and related software applications to a variety of multinational businesses. The Company operates in three segments: the language services segment, which is engaged in the provision of a translation     service to customer’s multilingual content; the language technologies segment, which is into the     sale of enterprise, desktop and statistical machine technology developed to help automate and     manage multilingual assets together with associated consultancy and other services, and the content  management technologies segment, which is into the sale of content management technologies."

This is the second new position that Soros Fund has disclosed via the London Stock Exchange recently.  We highlighted Soros' new 1Spatial stake last week.

Nantahala Capital Raises Stake in Motorcar Parts of America (MPAA)

Wilmot Harkey's hedge fund firm Nantahala Capital filed an amended 13G with the SEC regarding shares of Motorcar Parts of America (MPAA).  Per the filing, Nantahal has revealed a 9.45% ownership stake in MPAA with 1,366,613 shares.

This marks around a 12% increase in their position size since the end of the first quarter.  The amended 13G was required due to portfolio activity on June 7th.

Per Google Finance, Motorcar Parts of America is "manufactures , remanufactures and distributes new and remanufactured steering components, brake calipers, master cylinders, hub assembly and bearings, and clutches and clutch hydraulics for virtually all passenger and truck vehicles. It remanufactures alternators and starters for import and domestic cars, light trucks, heavy duty, agricultural and industrial applications. These products are distributed to both the do-it-yourself (DIY) and do-it-for-me (DIFM) markets. Its products are distributed predominantly throughout North America. The Company sells its products to the auto parts retail chains and traditional warehouses chains and to automobile manufacturers for both their aftermarket programs and their warranty replacement programs (OES).The Company operates in two segments: the rotating electrical segment and the under-the-car product line segment."

For more on this hedge fund, we posted up about another stock Nantahala has been buying.