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The Morning Brief: Cooperman on Presidential Choices
Leon Cooperman says he is “not a fan of the two leading contenders” for president. But given the choice between Donald Trump and Hillary Clinton, the founder of Omega Advisors thinks the stock market would be better off with the latter. “Hillary is less risky if she moves closer to the center,” the billionaire New York hedge fund manager said Tuesday in an interview on CNBC. The self-described “independent” seemed frustrated that Mitt Romney, who he calls “one of the most qualified” candidates, was vilified for his wealth and success when these qualities are working for Trump. But he made it clear he is turned off by Trump’s “style,” referring to his propensity to insult people, rather than advance solutions to problems, and his assertions about building a wall and making the Mexicans pay for it. He also raised questions about why Trump is unwilling to release his tax returns, speculating that it might be because his income, taxes or philanthropy is different from what he’s publicly pronounced. Whoever becomes president, Cooperman says the country “needs more on the fiscal side for economic growth and needs more on the education side.” As for the stock market, Cooperman says investors have taken a very conservative stance. He points out that half the stocks in the Standard & Poor’s 500 are yielding higher than bonds. He then repeated what he’s been saying in his quarterly letters, on television and at conferences for some time: the bull market ends with a hostile Federal Reserve and when there is optimistic sentiment in the market, among other factors. He sees 1810 as the low for the S&P 500 and expects the market to end the year “modestly higher” than where it started. “I see tons of stocks very cheap,” he said, saying that we have lived through a “stealth bear market” a year and a half. Among his favorite stocks: New York insurer AIG, which is trading at six and a half times next year’s earnings and is buying back a lot of stock. He also singled out aircraft-leasing giant Aercap, Internet powerhouse Alphabet — his largest position — Microsoft and Navient, which services student loans.
___Clint Carlson’s Carlson Capital disclosed it owns 13.02 percent of Ultratech, a semiconductor supplier. In a 13D filing, the Dallas hedge fund firm does not make any demands or requests of the company, saying that it bought the stock “for investment purposes in the ordinary course of business, and not with the purpose nor with the effect of changing or influencing the control or management.” Stand by for this one, though.
___Jeffrey Smith’s New York-based Starboard Value sold another 1.3 million shares or so of Darden Restaurants, which cuts its stake to 5.2 percent of the casual restaurant company. The sale is part of its earlier disclosed plan to periodically reduce its stake.
New York-based D.E. Shaw boosted its stake in BioCryst Pharmaceuticals, to 3.75 million shares, or 5.1 percent of the drug maker, which specializes in orphan drugs, autoimmune diseases, and antivirals.