With around five decades of stock-picking experience and billions to his name, Leon Cooperman is one stock-picking expert it pays to listen to.
Cooperman currently runsOmega Advisors, a hedge fund based in New York City, and one of the funds biggest bets isMonitise(LSE: MONI).
Omega Advisors owns around 15% of Monitise and has been averaging down over the past 12months.
Leon Cooperman believes that Monitise has some serious potential. He notes that the company has been working hard to build a strong relationship with big banks and other non-financial institutions since the beginning, and these relationships could prove to be extremely valuable.
In particular, Cooperman believes thatbanks desire to develop their own payment platforms, separate to those offered by the likes of Apple,could create opportunities for Monitise.
Nonetheless, Cooperman has acknowledged that Monitise might have lost its way. However, he has confidence in the mobile payment firms switch from a one-time license fee business model to a subscription-based model. Adobe Systems made a similar move several years ago, and the group has reported strong growth since.
Will take time
Leon Cooperman believes that Monitise will succeed over the long term. But the companys short-term prospects are more uncertain.
Indeed, Monitises new CEO, Elizabeth Buse, has plenty of work to do before the companys prospects start to improve. The good news is that, unlike her predecessor Alastair Lukies, Elizabeth has a wealth of experience in the mobile payments industry, having worked at Visa for 16 years.
Still,Monitise has repeatedly missed expectations and disappointed investors over the past few years. And with this in mind, its going to be difficult to trust the company until theres solid evidence that things are starting to turn around.Rebuilding investor trust should be a priority for Elizabeth Buse.
The company has stated several times over the past year that it is on track to hit its full-year, 2016 EBITDA profitabilitytarget. If Monitise can reach this target, it will be the first step towards rebuilding investor trust.
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Overall, Monitise has the potential to make it big. But the company needs to show that it can be trusted again before investors take the plunge.
Whats more, Leon Cooperman may well believe that Monitise will be a success but at current prices Monitise only accounts for 2% of his fund.
Clearly, Cooperman isnt willing to bet everything on Monitises recovery just yet.
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