Cooperman’s Credit Fund Rose 16%, May Turn Bearish on Stocks

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  • Omega Advisors founder says stocks are now fully valued
  • Pledges to continue fight against insider trading case

Hedge fund manager Leon Cooperman said three of his funds rose last year and warned he will become bearish on stocks if the market continues to rally.

Cooperman’s Omega Advisors saw its credit fund gain 16 percent in 2016, he said Thursday in an interview on CNBC. Its equity-focused fund rose 10 percent last year and a separate fund that blends those strategies gained 8 percent.

Cooperman, a renowned bull, said stocks are fully valued following the jolt to the market from the election of Donald Trump, who has infused investors with confidence. But Cooperman, who counts Google Inc. as his biggest holding, warned that if the market rises to euphoric levels, he will turn sour on stocks.

“If the market continues in the next month or two, like it’s been the last two or three months, I would be forced to become bearish,” he said.

It’s “reasonable” to expect equities to trade at 17 times earnings this year, he said. Cooperman said he likes apparel maker PVH Corp., MGM Resorts International and Hess Corp.

Omega lost about half its assets in 2016 amid an investigation by the Securities and Exchange Commission. It oversaw $3.4 billion as of Dec. 31, according to its website, compared with $6.7 billion at end of 2015. Cooperman, 73, said Thursday about 60 percent of the remaining assets are held by firm employees and about 40 percent is client money.

In September, the SEC accused both Cooperman and his firm of insider trading in Atlas Pipeline Partners securities in 2010. Today, he reiterated his vow to fight the case.

"I have great confidence in the judicial system," he said. "I’m completely confident that in the end we’re going to win."