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

Additionally, the company will continue to invest aggressively in original content (Netflix’s own production), which accounted for ~5% of the total viewership during 2013. Netflix will release at least six original shows, starting with House of Cards, Arrested Development, Orange is the New Black, Derek, etc. Netflix’s past experience with original content has been good. I feel that with the increasing tilt towards original content, its strategy to evolve as a complete service provider is on track. Looking at the strong content deals and the streak of original contents by Netflix I feel that it will be able to increase the number of subscribers domestically and the stock will gain some momentum.

Chesapeake Energy Corporation (NYSE:CHK)

The announcement of the stepping down of CEO Mr. Aubrey McClendon could lead Chesapeake Energy towards a more aggressive asset restructuring program compared to the previous expectations. In mid-2012 it was revealed that McClendon borrowed ~$1.1 billion from the company in the last three years and did not disclose this fact to investors. I believe that now a segment of investors who were earlier hesitant to invest in the company due to the concerns regarding corporate governance might take a second look at it, creating a slightly improved investor base.

With the exit of McClendon the asset sale is expected to accelerate to ~$19 billion in the year 2013. The change in leadership may give the restructuring plan a boost. Earlier Chesapeake’s strategy was to bring its debt under control by selling its non-core upstream and midstream assets. However, now it is expected that the new leadership can bring in a more effective plan of action. The company targets to repay ~$9.5 billion of debt by the end of 2013 to strengthen its otherwise shaky balance sheet. In 2012 under the asset sale program it sold most of its midstream assets, and the remainder of it will be sold by the end of 1Q 2013. In the future, I also see the sale of assets like Miss Lime, Northern Eagle Ford, Chitwood Knox, and some other non-core assets.

Looking into the negative side, this whole drama of the departure of the CEO may result in a liability of ~$53 million to the company to be paid as compensation to him. Moreover, the increase in the sale of assets may affect the overall profitability and revenue generation capacity of the company, resulting in a low free cash flow in the coming year. Considering all this, until any further information is obtained from the company I will stick to a hold call for this stock.

CVR Energy, Inc. (NYSE:CVI)

CVR represents ~23% of Carl Icahn’s portfolio. This second largest investment by the billionaire is relatively new, as most of it was made in 2012. He raised his investment in the company by ~465% in the second quarter of 2012, and it has been a good ride since then. In the end of January 2013, the CVR Energy traded at its best because the company declared a special dividend and a new quarterly dividend policy.

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

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

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!