Following the Coopermans: Resource America, Atlas America

by: Prudent Speculations

While it is important to always undertake a large amount of due diligence when researching an investment idea, it is just as important to make sure that after a period of time you’re not the only one who has come to the conclusion that your particular investment is so extraordinarily undervalued. 

That is why I have been thrilled that one of the premier father-son duos in value investing has been investing along side of me in the Resource America companies (NASDAQ:REXI), (NYSE:RSO) and the Atlas America companies (NYSE:ATLS), (AHD), (ATN), (NYSE:APL).  For those who are interested my investment thesis on Resource America can be found here, my Atlas America thesis here and my Atlas Energy Resources thesis here. 

Leon Cooperman, founder of Omega Advisors and former head of Goldman Sachs Investment Management along with his son Wayne Cooperman founder of Cobalt Capital Management have built considerable stakes in the Atlas and Resource America companies along with nearly every other company run by the Cohen family.  The Coopermans, through their separate hedge funds, control in excess of seven billion dollars; as a result, they are incredibly deep-pocketed investors and have the ability to act as stable components of any company’s shareholder base. 

The Coopermans, as seen in their large ownership stakes, clearly have a considerable amount of faith in these companies' prospects and in the ability of the Cohen family to run them.  I view their ownership stake as an affirmation of my investment thesis.  Below I have outlined the stakes of both Leon Cooperman and his son Wayne Cooperman in the Cohen companies.

Leon Cooperman’s Omega Advisors:

  • 1,566,100 shares or 9% of Resource America
  • 3,449,333 shares or 13% of Resource Capital Corp
  • 555,556 shares or 2% of Atlas Pipeline Holdings
  • 2,189,618 shares or 6.5% of Atlas Pipeline Partners
  • 2,219,666 shares or 8% of Atlas America
  • 3,727,627 shares or 6% of Atlas Energy Resources
  • 3,444,763 shares or 5.5% of RAIT Financial Trust
  • 654,358 shares or 1% of Alesco Financial

Wayne Cooperman’s Cobalt Capital Management:

  • 128,240 shares or >1% of Resource America
  • 24,500 shares or >1% of Resource Capital Corp
  • 194,445 shares or >1% of Atlas Pipeline Holdings
  • 689,936 shares or 2% of Atlas Pipeline Partners
  • 2,447,307 shares or 9% of Atlas America
  • 4,721,185 shares or 7.5% of Atlas Energy Resources

From these holdings we can see that between the two they control over 17% of Atlas America, nearly 14% of Atlas Energy Resources, 8.5% of Atlas Pipeline Partners, a little over 10% of Resource America and 14% of Resource Capital. 

Given the similarity of their portfolios, especially when it comes to their holdings in the Cohen companies, I would not be surprised to see Cobalt Capital boost its stake in Resource America just as Omega Advisors did this last week.  As they increase their stakes in Resource America, I have no doubt that other value investors will begin to piggyback on their trades. 

It is my hope that this will give the stocks of Atlas America, Resource America and their publicly traded subsidiaries the momentum they need to move dramatically higher.  The Coopermans' large stakes in the Cohen companies clearly gives support to many of their companies and their unique operating models.  I am more then content on continuing to profit alongside of these two great value investors. 

Disclosure: Long ATLS, AFN, REXI