Lee Cooperman Dumps Sandridge Energy Position

Omega Advisors' Lee Cooperman has filed a 13G with the SEC regarding shares of Sandridge Energy (SD).  Per the filing, Cooperman no longer owns a stake in the company.

The filing was made due to activity on June 19th.  At the end of the first quarter, Cooperman previously owned over 24.3 million shares of SD.

Sandridge shares have collapsed even further since the first quarter and now Cooperman has exited the name entirely.  He also recently sold his position in Caesars Entertainment, another troubled stock.

Per Google Finance, Sandridge is "an oil and natural gas company. The Company operates in three business segments: exploration and production, drilling and oil field services, and midstream services. The exploration and production segment explores for, develops and produces oil and natural gas in the Mid-Continent. The drilling and oil field services segment performs services for third parties, including third-party working interests in wells that it operates. The midstream services segment is engaged in gas marketing. The Company focuses on exploration and production activities in the Mid-Continent region of the United States. It also operates businesses and infrastructure systems, including gas gathering and processing facilities, marketing operations, a saltwater disposal system, an electrical transmission system and a drilling rig and related oil field services business."

Lee Cooperman Trims SandRidge Energy & New Residential Stakes; Adds to THL Credit

Omega Advisors' Lee Cooperman has filed a myriad of amended 13G's with the SEC as of late.  We covered some of his recent portfolio activity here.  In other recent moves, Cooperman was out trimming 2 stakes, and adding to another.


Trims SandRidge Energy

First, Omega Advisors has reduced its position in SandRidge Energy (SD) by over 13.3 million shares since the end of the third quarter.  Per the 13G filed with the SEC, Cooperman now owns just over 32.1 million shares.  This was made due to activity on December 31st.

Per Google Finance, SandRidge Energy is "an oil and natural gas company. The Company focuses on exploration and production activities in the Mid-Continent region of the United States. The Company also operates businesses and infrastructure systems, including gas gathering and processing facilities, marketing operations, a saltwater disposal system, an electrical transmission system and a drilling rig and related oil field services business."


Cuts New Residential Stake

Next, the hedge fund manager also cut his exposure to New Residentail Investment Corp (NRZ).  After selling over 3.8 million shares, he's left owning over 7.97 million shares.  The filing was also made due to activity on December 31st.

Per Google Finance, New Residential Investment Corp is "a real estate investment trust. The Company focuses on investing in, and actively managing, investments related to residential real estate. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management. The Company primarily target investments in excess mortgage servicing rights, residential mortgage backed securities, residential mortgage loans and other related investments."


Adds To THL Credit Position

Last, Cooperman also disclosed he has added to his THL Credit (TCRD) position.  After buying over 1.1 million more shares, he now owns over 2.11 million shares of the company.  The 13G was filed due to activity on December 31st.

Per Google Finance, THL Credit is "a non-diversified, closed-end management investment company. It operates as a business development company. The Company’s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of middle market companies. The Company is a direct lender to middle market companies and invest in subordinated, or mezzanine, debt and second lien secured debt, which may include an associated equity component such as warrants, preferred stock or other similar securities."

Don't forget you can see the rest of Cooperman's recent portfolio activity here.

TPG-Axon Capital Files 13D & 13G on SandRidge Energy Stake

Dinakar Singh's hedge fund firm TPG-Axon Capital has filed a 13D and then 13G with the SEC regarding their stake in SandRidge Energy (SD).

Per the 13G filing, the firm owns about 32 million shares, or 6.5% of the company: 4.1% via common stock and 2.4% economic on basket swap.  The firm executed a swap to realize certain gains/losses for tax planning.

This is a reduction in their position size, as they previously disclosed ownership of over 39 million shares at the end of the third quarter (via their last 13F filing with the SEC).

Per Google Finance, SandRidge Energy is "an independent oil and natural gas company. The Company is engaged in development and production activities in the Mid-Continent, Gulf of Mexico and Permian Basin in west Texas. Its primary area of focus is the Mississippian formation, a shallow hydrocarbon system in the Mid-Continent area of northern Oklahoma and Kansas. The Company also operates businesses that are complementary to its primary development and production activities, including gas gathering and processing facilities, an oil and natural gas marketing business and an oil field services business, including its wholly owned drilling rig business, Lariat Services, Inc. (Lariat)."

Lee Cooperman's Value Investing Congress Presentation: Are Equities Still the Best House in the Neighborhood?

We're posting up notes from the 2014 Value Investing Congress in New York. Next up is Lee Cooperman of Omega Advisors who presented: Are equities still the best house in the financial asset neighborhood?


Lee Cooperman's Value Investing Congress Presentation

• Market is fully / fairly valued. There is time and price left in us equity bull market and a respectable  S&P return expected in 12-18 months. Repeated the caveat that a geopolitical event could upend this prediction

• “Bear markets are born in despair, grow on skepticism, mature on optimism, die on euphoria.” ‘08/’09 was deep pessimism, have seen skepticism lately but we are near the end of that  now. Sees few signs of euphoria

• Nearly all us fixed income securities w/ exception of structured credit are uninteresting and   unattractive. This includes treasuries, investment grade corporates, HY bonds and soverign debt

• Equity markets in Europe and Japan should deliver respectable returns over coming year, could   outperform us as they are further behind in business cycle. Japanese valuations are attractive   because they have a comparable dividend yield but sell at 13.6x P/E vs. 16.8x P/E in US

• Dollar should be a strong currency over coming year

• Looking at average cycles:
o Bear market of ‘09 was 2x the average bear market, down -57% vs. -26% average. Also lasted 17 months vs. 13 month average
o Recession duration also prolonged and deeper than average. The average recession is characterized by -2% GDP and lasts 10 months.  In the '09 recession, GDP declined -4.3% and lasted 18 months
o Average recovery lasts 60 months and we are on slight overtime at 63 months today. 
o Market peaks about 7 months prior to economic peak. Thinks we don't have recession in 2015 so doesn't see a market peak today
o Cooperman thinks this recovery has the potential to exceed the average because so many companies were operating below potential

• Reason for caution:
o Seeing a lot of capitulation from the permabears, now hearing 3,000 S&P predictions from holdouts.  People waking up and getting bullish now are making a mistake
o Getting a little nervous that so many people who couldn’t see the positive outlook a few years ago now see such good opportunity
o Reiterated geopolitical risk multiple times
o Very concerned about income disparity in the economy. 75mm youth around the world are unemployed.  In the '40s an average factory worker made 1/30th of a CEO, now 1/900th
o Next crisis will be in public sector fundings. US government has $17tn debt with an average maturity < 4 years.  Meanwhile corporates have high liquidity and the banking sector is so highly regulated these days that a crisis probably won't come from them
o Another risk: recession/deflation in Eurozone or US
o Stocks also aren't really cheap – showed Buffett’s favorite stock valuation chart

• Regarding rising rates:  o If Fed doesn't raise rates, we have a problem in the stock market. If cash belongs at 0% and govt belongs at 4%, you shouldn't be making 15% in the stock market.  Rising rates should be indicative of an improving economy
o 1958 was the year of yield reversal when equities started yielding less in dividend yield compared to treasuries.  Now over 25% of S&P 500 non-financials yield more than 10yr note
o Relative to alternatives, equities still better. Fixed incomes just not attractive


Longs:  

• GARP: Actavis (ACT), Citigroup (C), Thermo Fisher (TMO)
• Income growth: Atlas (ATLS), Gaming & Leisure Properties (GLPI), KKR (KKR), Nordic American Offshore (NAO) 
• Asset restructuring: QEP Resources (QEP), Supervalu (SVU)
• High risk/high return: Altisource Portfolio Solutions (ASPS), Louis XIII (577 Hk), Monitise (MONLLN), Sandridge Energy (SD).

Cooperman's pick of ASPS was analyzed in the May issue of our Hedge Fund Wisdom newsletter if you want to play catch up on the name quickly.



Be sure to check out the rest of the Value Investing Congress presentations here.

Lee Cooperman's Favorite Stock Picks at Delivering Alpha Conference

At CNBC and Institutional Investor's Delivering Alpha conference today, Omega Advisors' Lee Cooperman shared his favorite stock picks.

He likes Actavis (ACT), a tax inversion play, Citigroup (C), a good buy he says because the economy is healing with loan demand and one that could narrow the discount to book value over time, as well as Gaming and Leisure Properties (GLPI) and Nordic American Offshore (NAO).

Other plays he likes include: QEP Resources (QEP), Supervalu (SVU), Louis XIII (577 HK), and Monitise (MONI.LN), the mobile payments play he's pitched before.

Lastly, he also mentioned Thermo Fisher Scientific (TMO), KKR (KKR) and Sandridge Energy (SD).

Cooperman also noted that the last time the Fed raised rates was in 2006 and around 25% of fund managers weren't really around to experience that.

He also joked that the last time he was bearish was during his Bar Mitzvah.

One quote that stood out from him was that, "if you buy something that's out of favor, things seem to happen to make you right."


Lee Cooperman will be presenting new investment ideas at the upcoming Value Investing Congress in a few months and readers can receive a discount to the event by registering here and using discount code: MARKETFOLLY

Lee Cooperman Likes SunEdison & Sandridge, Sees Market as Fairly Valued

Lee Cooperman, founder of Omega Advisors, appeared on CNBC today to talk about some of his favorite positions and market thoughts.

He continues to feel the market is fairly valued, around 16x earnings.  He pointed out that bull markets end from excesses.  That said, he also notes that investors are "underinvested" in equities, mainly due to fallout from the beatdown they received in 2008 as they've been reticent to get back in stocks.  He thinks the S&P will trade in a range of 1,600 to 2,000.

Some of his favorite picks include SandRidge Energy (SD), Sprint (S), Monitise (MONI.L), Qualicorp.  A new name for them is Sunedison (SUNE), a solar energy play that's spinning off its money-losing semiconductor business.  Cooperman feels it can see $20.  He also thinks SD has the potential to double and points out that TPG-Axon has been involved in this one pushing for change.

Lee Cooperman Video 1:



Lee Cooperman Video 2:



We've highlighted some other portfolio activity from Cooperman here.

Lee Cooperman's 4 Long Ideas at Invest For Kids Chicago

Next up in our notes from Invest For Kids Chicago 2013 is Lee Cooperman of Omega Advisors.  He pitched four long ideas and gave his outlook on equities in general.


Lee Cooperman's 4 Long Ideas at Invest For Kids Chicago

•    Equities still best house in neighborhood but not as solid as 2011
•    Sallie Mae worth $32
•    Market in zone of fair valuation
•    All about multiple you assume for the market
•    15 to 16 multiple is fair so market reasonable fully valued
•    Series of numbers – S&P up 23% jumps out at investors
•    Close to 3 multiple expansion the last few years
•    Bull markets don’t die from old age they die from recessions
•    Bonds overvalued & people in process of going out risk curve
•    Stock very cheap relative to fixed income
•    1 to 3% inflation then 16ish multiple makes sense
•    HY index at 6% versus 25%
•    HY has no great fascination at the present time
•    1958 yield revered – bonds versus stock – quarter of S&P 500 now yield more than (government) bonds
•    Wouldn’t be surprised to see the 10 year bond at 5%
•    Bull markets end at overvaluation; 2nd phase of bull market - rising earnings rising dividends (currently late here); 3rd & final: exuberance/excess.  (We've posted Cooperman's 3 stages of a bull market before if you missed it)

•    Negative if (1) recession (2) valuation at danger zone – if go up 10% then we would be at this place (3) growth less than 1% or more than 3% (fed tapering),
•    Doesn’t believe PEs are materially higher – profit margins cyclical


•    Idea #1: Atlas Energy MLOP (ATLS)
o    “More of everything – dividend of 2x S&P.
o    Trading way below sum of the parts o    On top of 2 other publically traded MLPs
o    Thinks it’s worth $60
o    Cheap relative to comps
o    No CapEx and lots of FCF


•    Idea #2: Monitise (London), a position we've highlighted on the site numerous times before
o    1.5 billion dollar market cap
o    Mobile wallet – software on phone that enables online bill pay
o    Blessing of Visa Europe & options of 20% of company
o    “Central to Visa Europe’s philosophy”


•    Idea #3: Sandridge Energy (SD)
o    “Bit of a turnaround”
o    Omega believes NAV is $10 per share


•    Idea #4: Sprint  (S)
o    Biggest position in history of firm at $2.
o    Still cheap now 
o    EV to sales and EV to paid sub is paid sub
For an in-depth look, we previously posted Omega's thesis on Sprint Nextel from their Q2 letter this year


Check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

Lee Cooperman on 3 Stages of a Bull Market: Interview

Omega Advisors' Lee Cooperman spoke with CNBC this morning.  He thinks markets are fairly valued and he thinks a 15-16x multiple is about right.  He doesn't think it's a bargain anymore.

Cooperman on the 3 Stages of a Bull Market

Phase 1: "Wow we survived."  As the market bottoms and pessimism slowly starts to fade.
Phase 2: "Reflecting that which is perspective."  4-5 years of rising economic activity.
Phase 3: "Exuberance phase, the silliness phase where people forget about the mistakes."  He doesn't think we're quite there yet, but there are pockets of silly valuation like Potbelly (PBPB) and Telsa (TSLA).


His Stock Picks Now

"What we're looking for is to find more growth at a lower valuation."  He said he's looking at 'red chips' instead of 'blue chip' stocks and specifically touched on Sprint Nextel (S).   He also likes Motorola Solutions (MSI), Swatch Group (UHR), Sandridge Energy (SD), and Qualcomm (QCOM).

Embedded below are the videos of Cooperman's interview:


Video 1 on bull market stages


Video 2 on Sprint (S)


Video 3


Video 4 on Qualcomm (QCOM)


For more hedge fund thoughts, we also posted up David Tepper's interview from today.

Delivering Alpha Best Ideas Panel: Mark Kingdon, Chris Hohn, Jim Chanos, Lee Cooperman

The Delivering Alpha Conference today featured a 'best ideas' panel that featured some hedge fund titans including Jim Chanos (Kynikos Associates), Chris Hohn (Children's Investment Fund), Mark Kingdon (Kingdon Capital), and Lee Cooperman (Omega Advisors).  Here's a brief summary of their picks:

Mark Kingdon, Kingdon Capital

Long Japanese automakers: Long Toyota (TM), Long Fuji Heavy (7270.TO) Long Mazda (7261.JP)

He says these companies obviously benefit from Abenomics in Japan.  Toyota he likes as an innovative leader with focus on hybrid technology.  Fuji Heavy (Subaru) is moving from low margin to high margin products.   He says Mazda might have the most upside of the names. 

Chris Cooper-Hohn, Children's Investment Fund

Long Porsche (PAH3.DE) - It's basically a holding company owning 150 million shares of Volkswagen.  If the two merge eventually, the stock doubles.  We've highlighted Hohn's thesis on Porsche before.

Long EADS (EAD.FR) - A liquid large cap with a new focus on making money.  Could double over 2 years. 

Long Aurizon Holdings (AZJ.AU)- Australian railroad, a total turnaround story as the company has transitioned from government-owned to a company more aimed at profit.  He thinks it could double over next 3 years


Lee Cooperman, Omega Advisors

Long Qualcomm (QCOM) - points to a large amount of cash on the balance sheet and a lot of pessimism on the name.

Long Sandridge (SD) - could be a double.

Long Express Scripts (ESRX) - company is growing and buying back stock.  We've also posted up another Cooperman interview recently where he talked about other stocks he likes.


Jim Chanos, Kynikos Associates

Short Caterpillar (CAT) - a bet on China's property development slowdown and he says the company is just exposed to the wrong products at the wrong part of the cycle.  Here's Chanos' pitch on CAT here.

Short Hewlett Packard (HPQ) - he also reiterated his call against the PC, saying it's dying a slow death.  This has been a longstanding short and we've posted up Chanos' thesis on HPQ as he called it a value trap last year.



For more from the Delivering Alpha Conference, head to:

- John Paulson on gold, real estate & merger arbitrage

- Nelson Peltz on PepsiCo & Mondelez

- Larry Robbins & Jacob Gottlieb on healthcare plays

- Carl Icahn on activism 

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).