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Leon Cooperman has his own special definition of value investing
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Loading...Although Cooperman no longer manages other people's money, he remains one of the greatest in history, and for good reason. It has been performing broad indexes for 20 years. This is no small feat, considering the majority of managers who are starting to lose under the pressure of the S & P500 after 10 or 15 years.
"I started Omega Advisors and managed it successfully." - says in an investment podcast. "We are about 300 points ahead of the S & P500 for 26 years."
Cooperman attributes his incredible performance on Wall Street to his concentration on value. He is quick to point out, however, that his thinking does not always coincide with that of the average stock investor.
"I differently define the value of investing in value than others. I try to find companies that grow faster than the index itself, and that sell at lower valuations. Or bring more profit than the index itself, carry more value in their assets - both options work perfectly for me. " - Cooperman adds.
This approach led him to invest significantly in three companies that would not, in most cases, meet the criteria of the average investor: Alphabet, United Airlines and Cigna.
And his conviction in these shares is so high that he has allocated 5% of his capital to his family office spread across the three companies. Although 5% may look a bit like a retail investor exposure when your portfolio is in the billions, 5% are downright impressive.
His justification ...
"Google that no one would identify as a value company - well, I call them such. A continuous series of better reports, with growth of 20% a year and a solid balance."
"United Airlines have bought back 35% of the shares back in the last five years. They are currently at 83/84, and I think they will go up $ 12 next year - capital narrows, but they are left with a lot of free and available cash. Warren Buffett owns 10% of the company. "
"Cigna generates about $ 8 billion in free cash available next year. Their results are slightly higher than the x8 expected, with buybacks of 3-4% on an annual basis."
Source: Business Insider Prime
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