Lee Cooperman’s Omega Advisors has produced a 51-site take note
to investors that particulars the hedge fund firm’s marketplace outlook
A person huge takeaway – things are looking superior for stock
Here are some of the important details from the January 19 letter,
which was penned by Omega founder Cooperman and the firm’s vice
chairman Steve Einhorn:
- Good S&P 500 growth. The S&P 500
can deliver an eight% to ten% return in 2017, “consisting of
earnings for every share growth of close to eight% (aided by a lower
corporate tax price and added share repurchase funded from
repatriated money), a dividend yield of two% and a marginally lower
than present marketplace P/E.”
- Very low yields. Set-revenue marketplaces in the
US and formulated economies have Omega anticipating US shares to
increase, in section since lower yields will encourage investors to
move to stocks.
- Rising interest fees “need to not pose a trouble for US
shares.” Among the Omega’s reasoning: “A huge
part of the lift in bond interest fees to be skilled
this 12 months will stem from anticipations of far more confidence in
economic growth and a lift in the bond marketplace phrase top quality/significantly less
safe haven flow instead than from a lift in inflation
expectation…these good reasons for a bond price increase need to not
be problematic to the S&P 500 P/E.”
“If our S&P 500 [earnings for every share] and bond price
discussions is accurate, investors need to probably have their ‘cake
and eat it too’ in 2017–well above ordinary earnings growth
without an attendant problematic lift in bond interest fees,”
Cooperman and Einhorn added in the letter.
A copy of the note, which also
2017 will be a terrific 12 months for active professionals, was
reviewed by Enterprise Insider.
Last 12 months, Omega’s flagship fund returned seven.seven% net of fees
as opposed to five.five% for the HFRI equity hedge index, in accordance to
the letter. This 12 months by means of January 18, the fund was up two.one%,
in accordance to the letter.
The Securities and Trade Fee filed
charges against Omega and Cooperman past 12 months with
allegations of insider trading. Cooperman has stated he is
innocent and plans to battle the charges in courtroom.
Omega at this time manages about $three.five billion, in accordance to a particular person
common with the subject, and has
faced outflows next the charges.