Banks Are 'Challenged,' I Invest Elsewhere: Leon Cooperman
Special to CNBC.com
When you're a heavyweight investor like Leon Cooperman, with thousands of publicly traded companies to choose from, you can afford to stay out of some underperforming sectors.
The CEO of Omega Advisors and former head of Goldman Sachs Asset Management is staying away from most banking stocks, he told CNBC Tuesday.
"The stock market has 15,000 publicly traded companies that are in my universe," he said. "I think the banks are challenged. We try to look where we can put together a decent story, and there’s plenty of very cheap stocks."
He does have a small investment in JPMorgan Chase and PNC Financial but his exposure to financial services is mainly through insurers MetLife and Lincoln National , and student loan company Sallie Mae .
European equities only make up 6 percent to 7 percent of his portfolio, he added. While he did not name his investments in that space, he said the average yield "is over 4 percent, the multiples are all single-digit and very cheap, and half their business is outside Europe. They’re global companies."
Mike Mayo's View:
In the same interview, Mike Mayo, managing director of Credit Agricole, said in the banking sector he has outperform ratings only on:
Wells Fargo ,
PNC ,
JPMorgan and
State Street .
He has many more sell ratings including, among others, on:
Citigroup and
Bank of America .
"I want the higher-quality banks. Some of the sell-rated stocks I have other issues with them, too," he said. "Citigroup is a nice intersection. I’m not convinced with the fundamentals. I’m also not convinced on the management and I’m not convinced that structural issues for the past decade have been fixed."
Mayo, author of the book, "Exile on Wall Street: One Analyst's Fight to Save the Big Banks From Themselves," harshly criticized Citiand Bank of America in a separate CNBC interview earlier Tuesday.
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Disclosures:
Disclosure information was not available for Mike Mayo but Credit Agricole has investment and non-investment banking relationships with the companies mentioned.
