Carl Icahn: Analyzing Q3’s Top Buys

On November 14, Carl Icahn’s Icahn Capital Management filed its form 13F. In the third quarter, it included two new stocks. In the same period, it increased its stakes in four existing stocks.

Icahn’s top buys

In the third quarter, Icahn Capital bought a fresh stake in HP (HPQ). HPQ constituted around 4.6% of Icahn Capital’s portfolio of publicly traded securities. In 2019 so far, HPQ has fallen 1.6%, while the NASDAQ-100 Index has risen 30.5%.

Yesterday, CNBC reported that Carl Icahn had a 4.2% stake in HP. Moreover, citing the Wall Street Journal, the report outlined that the billionaire hedge fund manager wants a merger between HP and Xerox. Icahn Capital owned a 10.4% stake in Xerox at the end of the third quarter.

In the quarter, Icahn Capital’s other top buys were Cloudera (CLDR), Hertz Global Holdings (HTZ), and Caesars Entertainment (CZR). It increased its stakes in these stocks by approximately 1.9, 0.8, and 0.76 percentage points, respectively.

Top sells

In the third quarter, Icahn Capital reduced its holdings in Occidental Petroleum (OXY) by 1.7 percentage points. Icahn was against the Occidental Petroleum and Anadarko deal. Read Occidental Petroleum Earnings and Icahn versus Buffett to learn about his fight with Occidental’s management. In the second quarter, Icahn Capital was the sixth-largest institutional investor in the company.

Other top sales of Icahn Capital in the third quarter were Cheniere Energy (LNG) and Freeport-McMoRan (FCX). Notably, it reduced its holdings in the energy and metals and mining industries. Bearish outlooks for oil and natural gas prices have increased investors’ concerns about energy stocks. 

Icahn Capital’s top holdings

In the third quarter, Icahn Capital’s top holdings were Icahn Enterprises (IEP), CVR Energy (CVI), Herbalife (HLF), Caesars Entertainment, and Cheniere Energy. These stocks constituted around 47.7, 12.2, 5.2, 5.2, and 4.8 percentage points, respectively, of Icahn Capital’s total portfolio of publicly traded securities. 

Moreover, Icahn Capital is the largest institutional investor in Herbalife. In 2013, Icahn and Bill Ackman had opposing views on this company. Ackman was bearish on its stock, while Icahn was bullish. Ackman’s fund lost a considerable amount in HLF’s short position. From 2013 to date, HLF has risen 170.6%. This rise includes only price movement and excludes dividends. 

On November 5, Icahn Enterprises LP reported its third-quarter earnings results. It reported a net loss of $0.24 per limited partner unit. Analysts’ mean estimate projected IEP’s income at $0.44 per limited partner unit. On the same day, IEP fell 1.4%.

Moreover, Icahn Capital is the largest institutional investor in CVR Energy with a 70% stake. The next-largest institutional investors in CVR are the Vanguard Group and BlackRock Fund Advisors. These funds have stakes of around 3% and 1.9% in CVR, respectively.