By Matt Doiron

The SEC requires hedge funds and many other large investors to file 13Fs several weeks after the end of each quarter, disclosing many of their long equity positions in U.S. stocks as of the end of the quarter. We have found that these filings can be a useful source of information for investors; for example, the most popular small-cap stocks among hedge funds outperform the S&P 500 by 18 percentage points per year on average (learn more about imitating hedge funds' small cap picks). One of the filers we track is billionaire Leon Cooperman's Omega Advisors. Read on for our thoughts on Omega's five largest holdings as of the beginning of this year, which it had also reported owning at the end of 2010 (or see the full list of stocks the fund reported owning):

Omega disclosed ownership of about 16 million shares of SLM

I have searched for highly profitable companies that pay solid dividends, and that have a very low trailing and forward P/E ratio. I also looked for companies that are in a short-term, mid-term and long-term uptrend. Stocks in an uptrend are performing well and are in a buying mode.

I have elaborated a screening method, which shows stock candidates following these lines. Nonetheless, the screening method should only serve as a basis for further research. All the data for this article were taken from Yahoo Finance and finviz.com.

The screen's formula requires all stocks to comply with all following demands:

1. The forward dividend yield is greater than 2.80%.
2. The payout ratio is less than 70%.
3. Trailing P/E is less than 10.
4. Forward P/E is less than 9.
5. Stock price is above 20-day simple moving average (short-term uptrend).
6. Stock price is above 50-day simple moving average (mid-term uptrend).
7. Stock price is

Searching for the best value stocks, I decided to rank all the stocks that are included in the S&P 500 Index by the sum of their dividend and earnings yields.

Earnings are defined as:

The earnings per share for the most recent 12-month period divided by the current market price per share. The earnings yield (which is the inverse of the P/E ratio) shows the percentage of each dollar invested in the stock that was earned by the company. The earnings yield is used by many investment managers to determine optimal asset allocations.

I used the Portfolio123's powerful ranking system to grade all S&P 500 stocks based on this theme. All the data for this article were taken from Portfolio123.

The ranking system that I built searched for the best 20 stocks that are included in the S&P 500 by the sum of their dividend and earnings yields.

In my previous post, I tried to create a dividend stock portfolio that can outperform the market by a big margin. In that case, I created a screening method that shows such promise, but the demand was to rebalance the portfolio every four weeks and replace the stocks that no longer comply with the screening requirement with other stocks that comply with the requirement. Since most investors do not have the opportunity to rebalance the portfolio every four weeks, I created a new screening method that requires rebalancing the portfolio just once a year.

I have searched for profitable companies that are included in the S&P 500 and have dividend yield and dividend growth rate greater than their industries' dividend yield and dividend growth. Those companies would have to show also solid earnings growth prospects, and that their last five years earnings growth is greater than their industries' earnings

Q1 2013 Earnings Call

April 18, 2013 8:00 am ET

Executives

Steven J. McGarry - Senior Vice President of Investor Relations

Albert L. Lord - Vice Chairman, Chief Executive Officer, Member of Executive Committee and Member of Strategy Committee

Joseph A. Depaulo - Principal Financial Officer

John F. Remondi - President and Chief Operating Officer

Analysts

David S. Hochstim - The Buckingham Research Group Incorporated

Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc., Research Division

Eric Beardsley - Barclays Capital, Research Division

Bradley G. Ball - Evercore Partners Inc., Research Division

Moshe Orenbuch - Crédit Suisse AG, Research Division

Michael Tarkan - Compass Point Research & Trading, LLC, Research Division

Sameer Gokhale - Janney Montgomery Scott LLC, Research Division

Scott Valentin - FBR Capital Markets & Co., Research Division

Presentation

Operator

Good morning. My name is Brent, and I will be your conference operator today. At this time,

VIX - Market Sentiment

Wednesday futures of the S&P were under heavy selling pressure as markets around the globe traded lower across the board. Led mostly by Europe losses were in above 1.5% in most cases futures sharply lower after markets across the world were lower across the board. Investors rushed for the sidelines and looked to put protection to help hedge against losses from falling equity prices. Commodities volatility continues as both Gold ETF (GLD) and Silver ETF (SLV) again try to rebound from the massive sell-off. Market bulls stepped up again right at the 50 dma causing the SPX to bounce near the 1540 level testing it yet again for the third time in less than six weeks. If this level breaks be careful as 1522.49 is the next Fibonacci retracement point from the November low. Tomorrow has two key economic readings, which must be closely watched

With the volatile swings in Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) shares over the past week, many investors have been left scratching their heads. The biggest impetus for a stock rally appears to be the possibility that Fannie Mae will recognize its massive Deferred Tax Asset with its 4th-Quarter 2012 earnings. Earnings have been delayed as the accountants, regulators, and politicians deliberate. It's reported to be more than $60 billion and has been building up over the years with a valuation allowance against it to offset its value.

(click to enlarge)

Outside of these facts, it's hard to imagine why Fannie Mae common stock would more than double. Last August 17, the Treasury instituted a dividend sweep of each GSE's net worth that will potentially pull every single cent of profit to the Treasury. However, with the recognition of the Deferred Tax Assets in

By Matt Doiron

We track 13F filings from hedge funds and other notable investors because even with the inherent delay in the information provided in these filings there are multiple ways for retail investors to use them. For example, even with the lag the most popular small-cap stocks among hedge funds, as determined by these filings, outperform the S&P 500 by an average of 18 percentage points per year (read more about small-cap stock picks). Investors can also use hedge funds' top picks as a source of initial ideas for further research, and we can refine these picks further by looking at a number of criteria including price-to-earnings multiples. Read on for our quick take on the five largest holdings from billionaire Leon Cooperman's Omega Advisors with both trailing and forward P/Es of 15 or lower (or see the full list of Cooperman's stock picks):

The fund owned

By Michael Vodicka

The financial crisis of 2008 produced what many insiders consider the greatest trade ever.

With the economy and stock market buckling under the weight of the worst financial crisis in 70 years, the decline in the housing market that began in the second quarter of 2006 accelerated. No city or neighborhood was safe. High-growth areas such as Phoenix, and Las Vegas, saw home prices decline as much as 70% -- national home values were decimated, which have yet to fully recover.

But three steps ahead of the curve was John Paulson, a little-known hedge fund operator from New York. Years before, Paulson laid the foundation to profit from what he calculated as unsustainable prices: He placed huge, leveraged bets against the housing market.

Paulson and his small team of analysts would score a mind-blowing $15 billion profit, giving birth to what many insiders today call the "The

By Jake Mann

We track more than 400 hedge fund managers, though just a small fraction (around 10%) have a net worth in excess of $1 billion. One of the most notable billionaires of our time is Leon Cooperman. Cooperman's fund, Omega Advisors, has amassed an equity portfolio of more than $5 billion.

While hedgies' 13F filings are reported to the SEC with a 45-day delay, this actually improves investors' ability to beat the market because, on average, fund managers are early into their investments. Our research has shown that hedge funds' top consensus picks beat the market significantly (see just how much here), so let's take a look at what Leon Cooperman's favorite stock picks were at the end of the fourth quarter.

Sprint Nextel (S) is Cooperman's new No.1 pick after sitting at the 3rd-spot in his 13F portfolio at the end of the third

February 13, 2013 9:30 am ET

Executives

Albert L. Lord - Vice Chairman, Chief Executive Officer, Member of Executive Committee and Member of Strategy Committee

Analysts

Moshe Orenbuch - Crédit Suisse AG, Research Division

Presentation

Moshe Orenbuch - Crédit Suisse AG, Research Division

Across the room next door just finished. But in the interest of time, I'll do my intro and let people filter in. If you think about it, I think really the only constant thing for Sallie Mae over the last 5 years or so really has been the amount of change in their business model and how the company has been able to react. It's been truly remarkable. Company's continue to evolve. It's positioned itself right now as the largest servicer of government-guaranteed loans and is expanding that business aggressively while working diligently to deploy its cash flow in the most optimal fashion. Significantly

VIX - Market Sentiment:

So the first day of February, S&P futures were amazingly quiet overnight, moving just 4 handles top to bottom prior to the unemployment numbers. The much anticipated jobs number showed payrolls rose 157K following a revised 196K in the previous month. This report sent S&P and DOW futures to the highs as the DOW attempts to approach and take out the 14K mark. Other positive news came in the form of consumer sentiment, as reports showing a better than expected 73.8 versus and expected 71.5 also helped move the needle. On the earnings front, Merck (MRK) earnings beat estimates, but issued a cautious outlook, putting pressure on the stock early. Regardless of the earnings, the market continues to build a base above 1500 and thus continues trying to make the climb to 1525-1535. The NYMO finished negative for the second day in a row

VIX - Market Sentiment:

Monday S&P futures were trading mostly flat heading into the open trading less than 6 handles top to bottom. The market continues to power higher even with a dismal report and outlook from DOW heavyweight Caterpillar (CAT). Two of the big movers today on high volumes were names, which I am long and short Keryx Pharma (KERX) and 3D Systems (DDD). For those who follow my trades on twitter I have been shorting DDD following the big put activity for the last 2 weeks. Today those puts are managing some huge gains as volatility is exploding as the stock sells off on massive volume. KERX however I am not as happy with as I unfortunately sold the 4.00 strike calls for .45 last week and left more than 2.00 of upside on the table. Regardless a gain is a gain and I'll keep looking to find

Do you prefer stocks that pay dividends you can rely on? We ran a screen with this idea in mind.

We began by screening the S&P 500 for dividend stocks: those paying dividend yields above 2% and sustainable payout ratios below 50%.

Then we screened that universe for those that appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing," Benjamin Graham.

It is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research

Q4 2012 Earnings Call

January 17, 2013 8:00 am ET

Executives

Steven J. McGarry - Senior Vice President of Investor Relations

Jonathan C. Clark - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Albert L. Lord - Vice Chairman, Chief Executive Officer, Member of Executive Committee and Member of Strategy Committee

John F. Remondi - President and Chief Operating Officer

Analysts

Bradley G. Ball - Evercore Partners Inc., Research Division

Leon G. Cooperman - Omega Advisors, Inc.

David S. Hochstim - The Buckingham Research Group Incorporated

Mark C. DeVries - Barclays Capital, Research Division

Michael P. Taiano - Telsey Advisory Group LLC

Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc., Research Division

Sameer Gokhale - Janney Montgomery Scott LLC, Research Division

Mahmood Reza

Scott Valentin - FBR Capital Markets & Co., Research Division

Moshe Orenbuch - Crédit Suisse AG, Research Division

Presentation

Operator

Good morning. My

VIX - Market Sentiment:

Wednesday, S&P futures were down across the board, taking yet another page from the "Global Growth Slowness" story. Futures did trade in a very tight range, moving just 7 handles top to bottom, opening near the 1460 level. Boeing (BA) and JP Morgan (JPM) put the market under pressure early. BA had yet another incident with the 787 Dreamliner on Tuesday, which continues to put pressure on the stock. On the other side of the coin, Goldman Sachs reported an absolute blowout in earnings, crushing Wall Street's estimates across the board. A check of the NYMO shows the oscillator closed at +29.38 again, showing the market is neither overbought nor oversold at this point.

For those who track VIX futures, today is settlement Wednesday, where all cash futures are paid out on the first spot CBOE Volatility Index (VIX) reading. As I pointed out

On November 27, the New York Fed reported that during the third quarter, non real-estate household debt rose 2.3%. The primary driver of that expansion -- accounting for $42 billion of the total $62 billion increase -- was student loan debt. Out of that $42 billion, only $23 billion was attributable to new student loans. The other $19 billion reflects previously defaulted student loans that were just finding their way onto credit reports. The Fed's data indicated that the percentage of student loans over 90 days delinquent had risen to 11% during the quarter, a new all time record and up 2.1% from the previous quarter.

Default Rates

As it turns out, 11% is quite a telling figure. The delinquency rate for student loans is now higher than all other types of debt, surpassing the 90+ day delinquency rate for credit cards, which stands at around