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By Matt Doiron

Contrary to many investors' beliefs, hedge fund 13F filings actually can be useful in helping drive market-beating returns. Our research shows that on average the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year, and our own portfolio based on these picks in real time outperformed the S&P 500 by 33 percentage points in the last 11 months (learn more about our small cap strategy). Another potential use for 13Fs is to treat individual fund managers as your own unpaid interns: don't necessarily do whatever they say, but screen their investment ideas for any interesting names which are worthy of further research. Read on for our thoughts on the five largest single-stock positions in billionaire Leon Cooperman's Omega Advisors' portfolio as of the end of June, see the full filing on the SEC's website, and compare these picks to those in previous filings.

Omega increased its stake in Sprint Nextel- now Sprint Corporation (NYSE:S) following the majority takeover from Softbank (OTCPK:SFTBF) - to over 95 million shares by the end of the second quarter of 2013. Softbank had not only purchased a large share of Sprint but also provided the new company with cash; Sprint Nextel had been consistently unprofitable in the previous few quarters, and this should help it fund its operations. Based on the company's trailing EBITDA numbers prior to the deal, the current EV/EBITDA multiple is 8.5x and so it appears that the market is already pricing in something of a turnaround.

While Cooperman and his team trimmed their stake in SLM (NASDAQ:SLM) by 12%, the student loan originator and servicer known as "Sallie Mae" remained one of their top picks. Of course many investors will want to stay away from student lending entirely, given the relatively high rate of delinquencies in the industry, though Sallie Mae does have a decent level of earnings relative to its valuation. Specifically, the forward P/E is 10 based on analyst beliefs that a recent boost in the company's profits will prove temporary.

The fund also sold a number of its shares of American International Group (NYSE:AIG), but closed June with 5.8 million shares in its portfolio. The bailed-out insurer's stock price has been on the rise over the last year, but it still trades at a discount to the book value of its equity with a P/B ratio of 0.7. Wall Street analysts are also calling the stock a good value on an earnings basis following its pattern of asset sales, with projections which imply a forward earnings multiple of 11. We wouldn't take their projections on faith, but AIG may still be worth looking into.

Sirius XM (NASDAQ:SIRI) was another of Omega's top picks with the filing disclosing ownership of about 72 million shares. In the second quarter of 2013, Sirius's revenue grew by 12% with pretax income up by nearly 50% (reported earnings were down on a large tax benefit in the prior year period). At trailing and forward P/Es of 49 and 30, respectively, markets have already worked a good deal of future growth into the current stock price. This makes it a bit speculative for our taste, though we might check in after a couple quarters of more results.

Rounding out our list of Cooperman's favorite stocks from the beginning of July is Qualcomm (NASDAQ:QCOM). Qualcomm is a potential "growth at a reasonable price" prospect in our view, since its trailing earnings multiple of 18 places it well outside traditional value territory but recent growth rates have been high (over 30% on both top and bottom lines). We'd certainly expect those growth rates to slow, but even at a third of that level the company could easily justify its current valuation. Analyst expectations over the next several years result in Qualcomm posting a five-year PEG ratio of 0.9.

Source: Billionaire Leon Cooperman's Top Stock Picks