By now, Leon Cooperman has more than proven his clout as a stock analyst. But a recent SEC charge of insider trading has cast a pall over the investment manager’s legacy. It’s a shame, really, whether or not the charges have merit. Cooperman has a sterling record, at least in the management of other people’s money, and his firm’s numbers have taken a terrible hit since the charges came forward.
Clients have been pulling their money. Assets under management declined from $4.7B to $3.4B last December (-27%), and managed funds have plummeted a nauseating 64% over the past two years.
In the midst of this, Omega Advisors keeps getting passable returns, with 8% growth in 2016. That’s not great, frankly, in a year where the S&P grew 10%. Still, Cooperman has an impressive career and deep knowledge about equity valuation. We’ll take a look at some of his recent picks and try to see if he’s still got it, especially considering the ongoing insider trading scandal.
As always, let us know what you think.
BREAKING: Leon Cooperman’s Omega Advisors, which reported new Apple stake as of March 31, has already liquidated position – source
— CNBC Now (@CNBCnow) May 16, 2016
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What is Leon Cooperman Investing in These Days?
Leon Cooperman has expressed confidence in the current equities market, despite lots of other analysts’ view that stocks are highly overvalued. Cooperman is of the opinion that the market is fully valued, and that’s a significant difference. Most pickers seem to think that we’re on the verge of a crush or another full bore bull market. Cooperman forecasts modest growth in the coming months.
As for where he’s parking his clients’ money:
Alphabet Inc. ($GOOG): This is a significant position for Omega. Cooperman sees more bang for your buck (trading on a lower multiple) with Google than with most other opportunities in today’s market. Google occupies a remarkable position in today’s work, with a ubiquitous service, countless development points, great expansion potential, and money to burn. But do you really need to pay Leon Cooperman to tell you that?
Facebook ($FB): By all appearances, Facebook is still a growth stock. It’s a foundational layer beneath nearly everything we do online. But you already know this. $FB is a no-brainer.
Microsoft ($MSFT): OK, now I’m just bored. Microsoft. Big company. Much dividends. Make you rich like Bill Gates.
Apple ($AAPL): Another safe pick…oh wait…Omega just sold all of their Apple. Huh. Seems like a missed opportunity.
Should You Invest with Leon Cooperman and Omega Advisors?
You probably see where I’m going with this. Anybody could tell you to invest in those companies.
Cooperman has been picking big winners and safe bets of late, something that anyone with a passing awareness of the current stock market, and a little money to burn, could do without an advisor. Cooperman is of the age when stock pickers offered a real service to their clients. Today, their value proposition is basically nil, except in the rarest of exceptions.
If you want to know what to invest your money in, do your own damn research. Managed funds rarely beat the market, as we all know. Cooperman’s decisions reek of timidity in a time when his fund needs to hang onto as many clients as possible during the pending investigations.
This serves as a cautionary tale to investors who choose to rely on the expertise of those within the fading advisor industry. Today, anyone can be an expert. Add to your knowledge and save those hefty advisor fees. Best of luck to Leon Cooperman, but I really don’t see what Omega brings to the table in 2017.