Omega's Cooperman: Equity Markets 'Fairly But Fully Valued'

Aug 31 2016 | 10:10pm ET

By Jennifer Ablan (Reuters) - Hedge fund investor Leon Cooperman, the chief executive and chairman of Omega Advisors, said on Wednesday on CNBC that equity markets are "fairly but fully valued."

Cooperman, who oversees more than $5.3 billion, said investors would be "lucky" to earn 5 percent to 6 percent in equities. Cooperman said it is "hard to find things that are terribly mispriced," given central banks' loose monetary policies have elevated asset prices across the board.

After the S&P 500's run-up to around 2,165, the index is currently trading at 17 times Cooperman's estimate, he said.

"[The] market is fairly but fully valued," Cooperman said. "I would not expect the market to do that much on the upside. We have to accept the reality that if interest rates belong where they are, that's a slow-growth world and returns on equity are going to be lower than they have been historically. And I accept that fact."

Cooperman said he has exited shares of Netflix and Citigroup. "I think ultimately Netflix is going to work, but I think somebody buys the company at a nice premium," Cooperman said.

"Netflix is an acquisition candidate for somebody. But again another idea came in, I didn’t want to raise my exposure so I sold and went to something else."

Cooperman said he's also out of Apple shares.

"My concern is that Apple’s best days might be behind it because there’s nothing to replace the iPhone and so it’s a company that generates lots of cash but may be a smaller company in three of four years," he said. "So we’ve put our money elsewhere, say Google, or Facebook, which we think has more visible growth."

Asked which presidential candidate would be better for financial markets, Cooperman said Democrat Hillary Clinton: "Hillary, for sure."

Cooperman said Clinton is more predictable than her Republican rival, Donald Trump, with regard to policies.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Hedge Funds Swarm Into Palm Beach

Oct 27 2016 | 2:32pm ET

As the first flakes of snow fall on New York's northern suburbs, Dan Weil of South...

Guest Contributor

Steinbrugge: Should Public Pension Funds Reduce their Hedge Fund Allocations?

Nov 1 2016 | 4:31pm ET

A growing number of large public pension funds - CalPERS, NYCERS, New Jersey, Ontario...