×

Leon Cooperman picks 19 stocks and talks about 2 fears

  • Leon Cooperman of the Omega Advisors hedge funds likes oil and technology in particular.
  • Technology could hurt the market in times of market weakness, while bonds also look scary, he said.

With his battle against regulators behind him, Leon Cooperman can focus fully on his reputation as a living legend of investing.

Earlier this month, the head of Omega Advisors settled insider trading charges leveled by the Securities and Exchange Commission. The damages came to $4.9 million, but without any suspension from the industry.

As he looks ahead to normalcy and getting back some of the $4 billion in client assets he lost during his SEC ordeal, Cooperman told CNBC that he's got 19 stocks on his radar screen. They are:

Stock
Symbol
YTD % return (as of 2 pm EDT 5/30)
Nabors NBR -49.2
Hess HES -24.5
Walgreens WBA 4.7
Facebook FB 32.3
United UAL 8.9
Dow Chemical DOW 6.6
Keane FRAC -30.2
WPX Energy WPX -23.2
PVH PVH 16.9
MGM Resorts MGM 10.6
AMC Entertainment AMC -30
AerCap AER 5.8
AIG AIG -1.6
Allergan AGN 6.1
First Data FDC 18.6
Navient NAVI -10.8
Shire SHP-GB -3.9
Arris ARRS -8.1
Alphabet GOOGL 25.4

Cooperman likes the energy stocks in particular, believing that oil prices are heading closer to $60 this year.

On the market in general, he believes there seems little in the air to trigger a major fall, but also sees limited upside room.

"The market outlook is OK, but I think the market for now is fully priced," he said during an interview on "Fast Money Halftime Report." "I think it's ahead of the fundamentals."

Worries about technology, bonds

One thing he said the market has working against it is the growing unlikelihood that key tenets of President Donald Trump's pro-growth agenda will get enacted this year. Another is that productivity remains low, while a third is that economy is near full employment and rising wages could start pushing inflation higher.

However, Cooperman also said signs indicating that a market tumble is coming aren't in the air. The global economy is growing, the Fed and other central banks remain accommodative even though they are gradually tightening monetary policy, and there is a lack of "excesses" in pricing or sentiment.

If anything, he believes market structure rather than fundamentals could prove the biggest issue ahead.

"With all the technology and all these (exchange-traded funds) and quantitative systems that have been introduced, I do have concern that technology has outpaced the market's ability to handle it," Cooperman said. "When we get into the next bear market, it could be a messy affair."

He also is advising against bonds.

Investors have continued to pour money into fixed income despite signs that inflation is on the rise and yields are going to move higher as well. Rising yields come as prices fall, eating into the principal of fixed income instruments.

"At the moment, the bubble is not equities," Cooperman said. "The bubble is fixed income."