Billionaire Carl Icahn Has Been Buying Herbalife Ltd. (HLF) and Transocean LTD (RIG)

With Icahn’s interest in Transocean LTD (NYSE:RIG), he now counts two energy stocks among his largest holdings given his roughly 60 million shares of shale gas producer Chesapeake Energy Corporation (NYSE:CHK). Chesapeake- which ran into trouble early last year after the company became financially stressed as a result of its overexpansion, prompting Icahn’s investment- is another favorite among sell-side analysts, with earnings forecasts over the next several years implying a forward earnings multiple of 10 and a five-year PEG ratio well below 1. Revenue grew by over 40% in its most recent quarter compared to the same period in the previous year.

Obviously Herbalife Ltd. (NYSE:HLF) is still something of a battleground stock, and we’d have to be quite sure it’s safe from regulatory action before investing, but certainly at current prices we’d strongly advise against being short. We do think that Chesapeake looks interesting, and would be interested in learning more about the company. As for Transocean LTD (NYSE:RIG), we’re skeptical that Icahn will be able to affect much change (due to its large size if nothing else) but the stock does look cheap assuming that the business can at least come close to analyst targets next year. Perhaps it could be a value prospect as well, particularly if next quarter’s results place it on track.

Disclosure: I own no shares of any stocks mentioned in this article.