Cooperman’s Omega Advisors Buys Las Vegas Sands Stock

Posted on: November 16, 2021, 02:05h. 

Last updated on: November 17, 2021, 08:02h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Omega Advisors, the hedge fund controlled by financier Leon Cooperman, added shares of downtrodden Las Vegas Sands (NYSE:LVS) stock in the third quarter.

LVS stock
Hedge fund manager Leon Cooperman, seen above, is bullish on LVS stock. His firm bought shares of the casino operator in the third quarter. (Image: CNBC)

The largest domestic gaming company by market capitalization, LVS was one of 10 new positions added by Omega during the September quarter and the only gaming equity. Cooperman’s investment firm bought 585,000 shares of LVS during the July through September period for a stake valued at $21.41 million, according to a 13F filing with the Securities and Exchange Commission (SEC).

SEC filings don’t include commentary from professional investors on their motivations for buying or selling particular stocks. However, it’s possible Omega sees value in the Venetian Macau owner.

Saddled by weakness in Macau — its largest operating market — LVS is down 30.64 percent year-to-date. That’s one of the worst performances among all US-listed gaming equities. Conversely, shares of operators with significant exposure to the Las Vegas Strip and the locals market there and/or strong regional portfolios are soaring in 2021.

LVS Stock Possible Value Idea

Omega’s 13F doesn’t reveal exactly when the hedge fund purchased LVS in the third quarter. But it’s likely the firm is in the red on the position.

The stock traded around $53 on July 1 before closing at $36 on Sept. 30 — the last day of the quarter. In mid-September, LVS and its fellow Macau concessionaires were drubbed after authorities there unveiled an array of proposals the investment community perceived as government interference. These include increased government oversight of gaming operations and potentially forcing operators to seek approval to pay dividends to shareholders.

Market participants are increasingly concerned Macau’s government could demand and get more equity in the gaming companies, exert more control over day-to-day operations, and wield more influence on companies’ capital expenditures.

Following that shellacking, some smaller investors stepped in to buy LVS stock, potentially sensing some value in the moribund gaming stock. It’s possible Cooperman feels the same way.

LVS Small Part of Omega Portfolio

Assuming Omega hasn’t added to or sold part of its Sands position since the start of the current quarter, the casino stock represents 1.14 percent of the hedge fund’s overall equity portfolio, and the investment firm controls 0.0.76 percent of the company’s shares outstanding.

LVS is one of five consumer discretionary stocks held by the hedge fund and the only gaming name.

Some analysts believe LVS management should show investors they have long-term faith in the stock and unveil a sizable buyback program over the near term. Sands hasn’t made an announcement to that effect as of yet, and it’s without a dividend after suspending the payout at the height of the coronavirus pandemic last year.