Carl Icahn, MHR Set Sights On Navistar International Corp (NAV)

Page 1 of 2

ICAHN CAPITAL LPIn a recent 13D filing with the SEC, Navistar International Corp (NYSE:NAV)’s largest shareholder, MHR Fund Management increased its stake by 17% to 12 million shares. The recent purchase adds to MHR’s already robust Navistar position. Navistar was MHR’s 4th largest 13F holding at the end of the third quarter, accounting for 9% of the firm’s total 13F assets. Another big name shareholder of Navistar is billionaire investor and famed corporate raider Carl Icahn (see Carl Icahn’s newest bets here).

Icahn begin building a position in Navistar, while concurrently building a position in Oshkosh Corporation (NYSE:OSK), with the idea to put pressure on the two companies – Navistar and Oshkosh – to merge their defense units. Icahn is now making an exit from Oshkosh after failing to get enough investor support to rearrange the company’s board of directors. Per a set of 13D filings this week, we can see that Icahn has already reduced his ownership of Oshkosh from 9.5% to 4.3%. Interestingly, Ray Dalio of Bridgewater Associates undertook a new position in Oshkosh last quarter (check out Ray Dalio’s full portfolio).

While Oshkosh has see recurring weakness in its defense segment, Navistar has more sustained product diversification, leading us to believe that Navistar is a better standalone investment. It appears that Oshkosh may still need a spinoff to help refocus its operations. Icahn appears to be making progress in Navistar, with two new members recently announced to the board of directors, and a third member to be agreed upon by Icahn and MHR.

Navistar’s trucking segment is around 70% of revenues, which manufactures medium-sized and heavy trucks in the U.S. and Canada. Navistar’s other segments include its engine (13.5%) and parts (14.5%) divisions, which make up modest portions of the company’s total top line. Boding well for Navistar is its dedicated customer – the U.S. government. This provides some stability for sales as it continues to get around 25% from government contracts that extend over several years into the future. MHR and Carl Icahn also have billionaire Ken Griffin as a fellow Navistar investor (see Ken Griffin’s latest picks).

Cummins Inc. (NYSE:CMI) has various exposures to many of the same markets that Navistar operates in. The engine maker expects revenues to be relatively flat this year after a 36% increase in 2011. North American truck engine sales are slowing, but emerging markets are expected to drive growth, particularly in India and China. This will boost the company’s long-term prospects, given that over 50% of revenues are derived from outside of North America. Other interim growth should be helped by pent-up demand in vehicle engines, due to aging truck and power-generating fleets. Cummins had billionaire George Soros taking a new position in the company last quarter (here’s what George Soros is buying).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

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 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

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones 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!