2 Stocks You Should Invest In From Icahn’s Wins: Herbalife Ltd. (HLF), Chesapeake Energy Corporation (CHK)

Page 1 of 3

ICAHN CAPITAL Carl IcahnFor now, it seems Bill Ackman is getting the better of fellow activist investor Carl Icahn. After the recent smackdown on CNBC between both billionaire investors over Herbalife Ltd. (NYSE:HLF), the stock observed a decline of ~20% in the last 20 days. I think the “zero target” that Ackman presented initially is impossible unless the government intervenes and shuts this company down. Icahn, on the other hand, won’t confirm if he owns any shares in Herbalife. According to the Wall Street Journal, he made a small position in this stock at the same time as Loeb. Looking from an investing perspective, I would not advise investing in Herbalife for now as the billionaires’ ego clashes are making it a battleground stock.

Speaking of Carl Icahn, this investor has shown active interest in oil and energy stocks. About 32% of his portfolio is dedicated to this sector. This year, he invested in Transocean Limited following his last year’s investment in Chesapeake Energy Corporation (NYSE:CHK) Corporation and CVR Energy, Inc. (NYSE:CVI) Incorporated. I have picked up three stocks in which Carl holds significant positions, and all three of them look strong with their long term fundamentals intact. Two of them belong to the basic materials sector, and the third is a company that provides internet subscription services. Let’s discuss them in detail:

Name of Company Percentage growth in stock price YTD (~) Carl Icahn’s Holding in Company’s Total Capital
Netflix, Inc. (NASDAQ:NFLX)
93.41% 10%
Chesapeake Energy Corporation (NYSE:CHK) 20.48% 9%
CVR Energy, Inc. (NYSE:CVI) 10.75% 82%

Source: Yahoo! Finance

Netflix, Inc. (NASDAQ:NFLX)

After posting a good 4Q12, strong guidance for 1Q13, and strong content deals, the stock price of Netflix has seen an upward trend. No one will be more pleased by this rise than Carl Icahn, who purchased his stake in this stock for only ~$321.4 million, a stake which is now valued at ~$970 million. In 4Q12 the company’s revenue rose by ~8% y/y and the total count of global subscribers reached ~33 million. Domestic streaming for the quarter led to an increase of ~2 million subscribers.

Netflix’s management expects that the company will continue to give a similar performance at least for the next two quarters. As per the guidance for 1Q 2013, the total number of domestic streaming subscribers is expected to be ~28.5 million, up from the current ~27.2 million. The targeted increase in the number of subscribers is achievable, considering the new content deals it recently entered into with Time Warner and Flavor Unit Entertainment. Time Warner has agreed to show some of the famous cartoon series on Netflix that include episodes of Green Lantern, Robot Chicken, etc. As per the deal, the content will be available on Netflix from this April onward. The deal will prove to be a boon for the company as Time Warner’s past success is well known, with its hit series like Ben 10, Johnny Bravo, etc. The company also entered into an agreement with Flavor Unit that gives it the rights to stream movies produced by Flavor Unit after they are released in theaters. It is to be noted that it is the same production house that produced hits like Beauty Shop, Bringing Down the House, etc.

Page 1 of 3
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!