Lee Cooperman Says Market is Fairly Valued, Talks Some of His Positions ~ market folly

Wednesday, March 6, 2013

Lee Cooperman Says Market is Fairly Valued, Talks Some of His Positions

Lee Cooperman, founder of hedge fund Omega Advisors sat down with CNBC this morning to share his thoughts on the market.

Is the Market Fairly Valued?

"Bernanke's told us everyday since 2009 that he wants higher inflation, more economic growth, lower unemployment,  he wants to create high stock prices to create wealth, to create consumption ... you have to ask yourself as a money manager: has he gotten the market to a zone of overvaluation?"

Cooperman thinks the market is now fairly valued and he thinks every bull market ends at overvaluation.  He concluded that, "So the market's still ok, but it's not a bargain anymore."

On Stocks With Yield

He says he has around 90 holdings and touched on  how investors are looking for yield, so he highlighted some of his positions that fit this mold:

- KKR Financial (KFN): 7.4% yield, growing 5% a year
- Chimera (CIM): accounting issues that he thinks will be resolved this year
- Atlas Pipeline (APL): 7% yield, growing
- Linn Energy (LINE): good yield and growing
- Transcoean (RIG): 4.2% yield and notes Carl Icahn's presence in the name as well

He made an interesting comment on yield as well, saying: "Almost half the S&P 500 right now yield more than bonds."

Growth Stocks He Likes

Cooperman also rattled off some of the stocks he likes that fit under the growth category:  Express Scripts (ESRX), Google (GOOG), and Qualcomm (QCOM).

On Short Selling

Cooperman was asked about Herbalife (HLF) and short selling in general.  He does not have a position in the company but made these comments about shorting: "It's not a wise thing to publicize your short position, and I would not publicize being short 20% of a company."

He also went on to say: "I have no problem with short selling, I think short selling adds some discipline to the market.

Embedded below are the videos of Cooperman's interview:

Video 1

Video 2

Video 3

We've published the rest of Omega's portfolio in the new issue of our Hedge Fund Wisdom newsletter.

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