In this article, we discuss 10 favorite stocks of activist Carl Icahn.
Carl Icahn was one of the first activist investors to gain mainstream popularity on Wall Street, and he is one of the most successful American financiers. He developed a name for himself as a corporate raider, owing to his massive profits from hostile takeovers, stripping company managements, and transforming operational strategies for the benefit of shareholders. He has recently announced that he will now fight for the rights of employees as well.
He is the founder and controlling shareholder of Icahn Enterprises L.P. (NASDAQ:IEP), and via his hedge fund, Icahn Capital LP, the activist investor manages a portfolio worth over $22 billion as per the 13F filings from Q4 2021. He stopped accepting outside funds for Icahn Capital in 2011.
“The US is headed for a recession”
On March 23, Carl Icahn discussed his views on the US economy. He believes that the country will dive headfirst into a recession while managing the rampant inflation and the spillover effects from Russia’s war against Ukraine. While he had no predictions for the short-term stock market, he stated that his investments were hedged for the longer-term, and the activist investment strategy provides an edge to Icahn Capital in this macro backdrop. He has spoken against the Fed’s quantitative easing strategies in the past, noting that printing more money can only end badly for the economy. He is also against long calls on the real estate and REIT sectors, noting how work-from-home and e-commerce are increasingly trending, thus lowering the demand for office and retail spaces significantly.
His fourth quarter portfolio holds stocks from the utilities and telecommunications, energy, industrials, healthcare, and consumer discretionary sectors, with a top ten holdings concentration of 95.44%. Some of the most notable stocks in Carl Icahn’s Q4 portfolio include Bausch Health Companies Inc. (NYSE:BHC), Occidental Petroleum Corporation (NYSE:OXY), and Cheniere Energy, Inc. (NYSE:LNG), among others discussed in detail below.
Our Methodology
We used the Q4 2021 portfolio of Carl Icahn’s Icahn Capital LP to select the activist investor’s top 10 stock picks. The securities are ranked according to the hedge fund’s stake value in each holding.
Favorite Stocks of Activist Carl Icahn
10. Dana Incorporated (NYSE:DAN)
Icahn Capital LP’s Stake Value: $326,018,000
Percentage of Icahn Capital LP’s 13F Portfolio: 1.46%
Number of Hedge Fund Holders: 16
Dana Incorporated (NYSE:DAN) was founded in 1904 and is headquartered in Maumee, Ohio. The company provides energy management solutions for automobiles and equipment in North America, Europe, South America, and the Asia Pacific. Icahn Capital LP owns 14.2 million Dana Incorporated (NYSE:DAN) shares as of Q4 2021, worth $326 million, representing 1.46% of the total 13F securities.
On April 27, Dana Incorporated (NYSE:DAN) reported earnings for the fiscal first quarter of 2022. The company posted an EPS of $0.16, beating market estimates by $0.03. Revenue for the period grew 9.59% year-over-year to $2.48 billion, outperforming analysts’ predictions by $236 million.
Dana Incorporated (NYSE:DAN) declared on April 20 a $0.10 per share quarterly dividend, in line with previous. The dividend is payable on May 27, to shareholders of record on May 6. Dana Incorporated (NYSE:DAN)’s dividend yield on April 28 came in 2.73%.
Barclays analyst Brian Johnson on April 28 maintained an Equal Weight on Dana Incorporated (NYSE:DAN) but lowered the firm’s price target on the shares to $16 from $18 following the Q1 beat. The analyst still expects the spotlight to be on input and supply chain costs, as well as the price recovery backdrop in 2022.
According to the fourth quarter database, 16 hedge funds were bullish on Dana Incorporated (NYSE:DAN), collectively holding stakes worth $536.75 million, compared to 20 funds in the prior quarter, holding stakes in the company valued at $553 million. Richard S. Pzena’s Pzena Investment Management is a significant position holder in the company, with 3.34 million shares worth $76.4 million.
In addition to Bausch Health Companies Inc. (NYSE:BHC), Occidental Petroleum Corporation (NYSE:OXY), and Cheniere Energy, Inc. (NYSE:LNG), Dana Incorporated (NYSE:DAN) is one of the favorite stocks of activist Carl Icahn.
9. Herc Holdings Inc. (NYSE:HRI)
Icahn Capital LP’s Stake Value: $629,776,000
Percentage of Icahn Capital LP’s 13F Portfolio: 2.82%
Number of Hedge Fund Holders: 27
Herc Holdings Inc. (NYSE:HRI) is a Florida-based company that rents industrial equipment in the United States, including material handling, trucks and trailers, air compressors, compaction, and lighting equipment.
Securities filings for Q4 2021 reveal that Carl Icahn held more than 4 million shares of Herc Holdings Inc. (NYSE:HRI), worth $629.7 million, representing 2.82% of the total 13F holdings. The hedge fund trimmed its stake in Herc Holdings Inc. (NYSE:HRI) by 11% in the fourth quarter of 2021.
Herc Holdings Inc. (NYSE:HRI) reported earnings for the first quarter of 2022 on April 21, posting an EPS of $1.95, missing estimates by $0.01. Revenue for the period grew 25% year-over-year to $567.30 million, surpassing analysts’ predictions by $14.53 million.
On April 22, Baird analyst Mircea Dobre maintained a Neutral rating on Herc Holdings Inc. (NYSE:HRI) but lowered the firm’s price target on the stock to $158 from $161. The analyst believes further upside is limited since very strong expectations are already embedded in guidance and estimates. The analyst’s medium-term view remains unchanged.
According to Insider Monkey’s fourth quarter database, 27 hedge funds placed long calls on Herc Holdings Inc. (NYSE:HRI), compared to 24 funds in the earlier quarter. The combined stakes held in Q4 2021 amounted to $1.36 billion. Mario Gabelli’s GAMCO Investors is a prominent shareholder of the company, with a position worth $316.2 million.
8. Xerox Holdings Corporation (NASDAQ:XRX)
Icahn Capital LP’s Stake Value: $727,081,000
Percentage of Icahn Capital LP’s 13F Portfolio: 3.26%
Number of Hedge Fund Holders: 23
Xerox Holdings Corporation (NASDAQ:XRX) is headquartered in Norwalk, Connecticut, operating as a workplace technology company. It sells document management systems and solutions in the United States, Europe, Canada, and international markets. Carl Icahn, as of Q4 2021, owns more than 32 million shares of Xerox Holdings Corporation (NASDAQ:XRX), worth $727 million, representing 3.26% of the total 13F holdings.
On April 21, Xerox Holdings Corporation (NASDAQ:XRX) reported a Q1 non-GAAP loss per share of $0.12, missing estimates by $0.25. The revenue of $1.67 billion beat market consensus by $40 million. The company expects FY2022 revenue of at least $7.1 billion versus consensus of $7.03 billion. Xerox Holdings Corporation (NASDAQ:XRX) projects to generate at least $400 million in free cash flow, and plans to return about 50% of cash flow to shareholders.
Xerox Holdings Corporation (NASDAQ:XRX) declared a $0.25 per share quarterly dividend on February 17, in line with previous. The dividend is payable on May 2, to shareholders of record on March 31. Xerox Holdings Corporation (NASDAQ:XRX)’s dividend yield on April 28 stood at 5.78%.
Among the hedge funds tracked by Insider Monkey, 23 funds were bullish on Xerox Holdings Corporation (NASDAQ:XRX) at the end of December 2021, compared to 35 funds in the preceding quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest shareholder of the company, with 2.8 million shares worth $65.4 million.
7. FirstEnergy Corp. (NYSE:FE)
Icahn Capital LP’s Stake Value: $788,869,000
Percentage of Icahn Capital LP’s 13F Portfolio: 3.53%
Number of Hedge Fund Holders: 40
FirstEnergy Corp. (NYSE:FE) is an Ohio-based company that generates, transmits, and distributes electricity in the United States via coal-fired, nuclear, hydroelectric, natural gas, wind, and solar power generating facilities. In the fourth quarter of 2021, Carl Icahn held almost 19 million shares of FirstEnergy Corp. (NYSE:FE), worth $788.8 million, accounting for 3.53% of the total 13F portfolio.
FirstEnergy Corp. (NYSE:FE) reported its Q1 2022 results on April 21, posting earnings per share of $0.60, falling short of analysts’ estimates by $0.02. The first quarter revenue increased 9.65% year-over-year to $2.99 billion, surpassing market predictions by $134.70 million.
On April 25, Credit Suisse analyst Nicholas Campanella initiated coverage of FirstEnergy Corp. (NYSE:FE) with an Outperform rating and a $51 price target. The analyst sees upside potential for FirstEnergy Corp. (NYSE:FE)’s valuation as it emerges from its legacy Ohio issues with its Transmission and Distribution business still intact. According to the analyst, FirstEnergy Corp. (NYSE:FE) is now better positioned to achieve primary regulated growth with controlled equity issuances.
According to Insider Monkey’s Q4 data, FirstEnergy Corp. (NYSE:FE) was found in the public stock portfolios of 40 hedge funds, who collectively held stakes worth $1.75 billion in the company. Robert Rodriguez and Steven Romick’s First Pacific Advisors is a prominent position holder in FirstEnergy Corp. (NYSE:FE), with 4.3 million shares worth $181.3 million.
Here is what ClearBridge Investments Global Infrastructure Income Strategy has to say about FirstEnergy Corp. (NYSE:FE) in its Q4 2021 investor letter:
“On a regional level, the Strategy’s largest exposure is in the U.S. and Canada (44%), consisting of regulated and contracted utilities (31%) and economically sensitive user-pays infrastructure (13%).
During the quarter we initiated new positions in U.S. electric utility FirstEnergy. With supply chain issues, higher housing costs, higher commodity prices and producer price inflation remaining square in the sights for 2022, we think higher inflation is a risk for global markets. We expect growth to slow to trend or below by mid-2022 and U.S.”
6. Newell Brands Inc. (NASDAQ:NWL)
Icahn Capital LP’s Stake Value: $954,509,000
Percentage of Icahn Capital LP’s 13F Portfolio: 4.28%
Number of Hedge Fund Holders: 26
Newell Brands Inc. (NASDAQ:NWL) is a Georgia-based manufacturer of consumer and commercial products, operating via five segments – Commercial Solutions, Home Appliances, Home Solutions, Learning and Development, and Outdoor and Recreation.
On March 30, JPMorgan analyst Andrea Teixeira reiterated an Overweight rating on Newell Brands Inc. (NASDAQ:NWL) but lowered the firm’s price target on the shares to $26 from $29. With the ongoing Russia/Ukraine war and its impact on costs, transportation, and currency, the analyst slashed estimates for the majority of the companies in the beverages and personal care space. However, the analyst forecasts resilient demand, observing that consumers still prefer brands over private labels.
Securities filings for Q4 2021 reveal that Carl Icahn’s hedge fund held 43.70 million shares of Newell Brands Inc. (NASDAQ:NWL), worth $954.5 million, representing 4.28% of the total 13F investments. The stock has featured on the activist investor’s portfolio since Q1 2018.
According to Insider Monkey’s database, Newell Brands Inc. (NASDAQ:NWL) was found in the public investment portfolios of 26 hedge funds in the fourth quarter of 2021, with collective stakes worth $1.74 billion. Jim Simons’ Renaissance Technologies is a prominent shareholder of the company, with more than 2 million shares valued at roughly $44 million.
Like Bausch Health Companies Inc. (NYSE:BHC), Occidental Petroleum Corporation (NYSE:OXY), and Cheniere Energy, Inc. (NYSE:LNG), institutional investors are pouring into Newell Brands Inc. (NASDAQ:NWL).
5. Bausch Health Companies Inc. (NYSE:BHC)
Icahn Capital LP’s Stake Value: $958,650,000
Percentage of Icahn Capital LP’s 13F Portfolio: 4.30%
Number of Hedge Fund Holders: 53
Bausch Health Companies Inc. (NYSE:BHC) is based in Laval, Canada, operating as a manufacturer of pharmaceuticals, medical devices, and over-the-counter drugs for eye health, gastroenterology, and dermatology. In Q4 2021, Carl Icahn’s Icahn Capital LP held 34.7 million shares of Bausch Health Companies Inc. (NYSE:BHC), worth $958.65 million, representing 4.30% of the total 13F securities. Icahn boosted his stake in the company by 2% in the fourth quarter.
On March 29, Bausch Health Companies Inc. (NYSE:BHC) announced its plans to reduce debt by $200 million by paying off its senior secured term loans on March 31, 2022, using cash from operating activities.
RBC Capital analyst Douglas Miehm on February 1 maintained an Outperform rating on Bausch Health Companies Inc. (NYSE:BHC) but lowered the firm’s price target on the shares to $34 from $40. The analyst updated his model to account for the filing of preliminary S-1 and prospectus by Bausch Health Companies Inc. (NYSE:BHC) regarding the Bausch+Lomb IPO. Due to the recent share price weakness, the analyst remains “constructive” on the stock’s outlook.
According to Insider Monkey’s Q4 data, 53 hedge funds were long Bausch Health Companies Inc. (NYSE:BHC), up from 39 funds in the preceding quarter. John Paulson’s Paulson & Co is a significant shareholder of the company, holding about 26 million shares worth $713.4 million.
Here is what Miller Value Partners has to say about Bausch Health Companies Inc. (NYSE:BHC) in its Q1 2021 investor letter:
“Bausch Health Companies (BHC) climbed 55% during the period. Glenview (6% owner) sent a letter to the company in early February arguing the company has not acted to unlock shareholder value and urging the company to sell its eye care business. Shortly after, activist investor Carl Icahn disclosed a 7.83% stake in the company. The company responded to the filing saying that they remain committed to splitting the business into two parts, but are open to pursuing all opportunities. The company reported strong 4Q results with better-than-expected 2021 guidance. 4Q revenue came in at $2,213M slightly ahead of consensus of $2,165M and EPS of $1.34 beat consensus of $1.12. The company guided for 2021 revenue of $8.6-8.8B coming in ahead of expectations of $8.55B with EBITDA of $3.4-3.55B ahead of $3.46B estimated. The company announced the transition of Paul Herendeen to an advisory role to be succeeded by Sam Eldessouky, previously senior vice president, controller and chief accounting officer. Finally, the company announced the sale of Amoun Pharmaceutical for $740M, which was relatively in line with estimates and should help support debt reduction targets ahead of the planned spin-off of Bausch + Lomb eye care business.”
4. CVR Energy, Inc. (NYSE:CVI)
Icahn Capital LP’s Stake Value: $1,196,850,000
Percentage of Icahn Capital LP’s 13F Portfolio: 5.36%
Number of Hedge Fund Holders: 13
CVR Energy, Inc. (NYSE:CVI) is a subsidiary of Icahn Enterprises L.P. (NASDAQ:IEP), operating in the petroleum refining and nitrogen fertilizer markets in the United States. Carl Icahn, as of Q4 2021, owns more than 71 million shares of CVR Energy, Inc. (NYSE:CVI), worth $1.19 billion, representing 5.36% of the total 13F portfolio.
On February 1, Citi analyst Prashant Rao reiterated a Neutral rating on CVR Energy, Inc. (NYSE:CVI) and lowered the firm’s price target on the shares to $21 from $23.
In 2021, CVR Energy, Inc. (NYSE:CVI)’s full-year revenue came in at $7.2 billion, compared to $3.9 billion in 2020. Net income in 2021 stood at $25 million, a sharp rebound from the loss of $256 million in the preceding year.
According to Insider Monkey’s Q4 database, 13 hedge funds placed long bets on CVR Energy, Inc. (NYSE:CVI), compared to 16 funds in the prior quarter. The total stakes held in the fourth quarter of 2021 amounted to $1.2 billion. Renaissance Technologies is a notable shareholder of the company, with a $10.3 million position.
3. Occidental Petroleum Corporation (NYSE:OXY)
Icahn Capital LP’s Stake Value: $1,304,560,000
Percentage of Icahn Capital LP’s 13F Portfolio: 5.85%
Number of Hedge Fund Holders: 58
Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based company engaged in the development of oil and gas properties in the United States, the Middle East, Africa, and Latin America. Carl Icahn’s fund owned 45 million Occidental Petroleum Corporation (NYSE:OXY) shares in the fourth quarter of 2021, worth $1.30 billion, representing 5.85% of the 13F holdings.
In 2021, Occidental Petroleum Corporation (NYSE:OXY)’s revenue for the year totaled approximately $26 billion, up from $17.8 billion in the earlier year. The company suffered a net loss of roughly $15 billion in 2020, and the income rebounded to $2.3 billion in 2021.
On February 24, Occidental Petroleum Corporation (NYSE:OXY) declared a $0.13 per share quarterly dividend, a 1200% increase from its prior dividend of $0.01. The dividend was distributed on April 15.
Barclays analyst Jeanine Wai raised the firm’s price target on Occidental Petroleum Corporation (NYSE:OXY) to $74 from $69 and reiterated an Overweight rating on the shares on April 22. The analyst forecasts relatively in-line Q1 results.
Among the hedge funds tracked by Insider Monkey, 58 funds were long Occidental Petroleum Corporation (NYSE:OXY) at the end of December 2021, compared to 60 funds in the prior quarter. Rajiv Jain’s GQG Partners is a significant shareholder of the company, with approximately 23 million shares worth $666 million.
Here is what Smead Capital Management has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2021 investor letter:
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
2. Cheniere Energy, Inc. (NYSE:LNG)
Icahn Capital LP’s Stake Value: $1,639,820,000
Percentage of Icahn Capital LP’s 13F Portfolio: 7.35%
Number of Hedge Fund Holders: 52
Cheniere Energy, Inc. (NYSE:LNG) was incorporated in 1983 and is headquartered in Houston, Texas. It operates as an energy infrastructure company in the United States. In the fourth quarter of 2021, Carl Icahn held more than 16 million Cheniere Energy, Inc. (NYSE:LNG) shares, worth $1.6 billion, representing 7.35% of the total 13F securities.
On April 26, Cheniere Energy, Inc. (NYSE:LNG) declared a $0.33 per share quarterly dividend, in line with previous. The dividend is payable on May 17, for shareholders of record on May 10.
Cheniere Energy, Inc. (NYSE:LNG)’s full-year revenue for 2021 stood at $17.5 billion, compared to $9.2 billion in the last year. The net loss in 2021 increased to $2.3 billion from $85 million in 2020.
Barclays analyst Marc Solecitto on March 14 raised the price target on Cheniere Energy, Inc. (NYSE:LNG) to $160 from $131 and kept an Overweight rating on the shares. The analyst noted that sentiment around natural gas “notably improved” and recent management conversations centered around the “robust” liquefied natural gas macro backdrop, growth outlook, and capital allocation.
According to Insider Monkey’s Q4 data, Cheniere Energy, Inc. (NYSE:LNG) was found in the public stock portfolios of 52 hedge funds, compared to 49 funds in the earlier quarter. Michael Lowenstein’s Kensico Capital is a notable shareholder of the company, with 2.3 million shares worth $241.5 million.
Here is what ClearBridge Global Infrastructure Value Strategy has to say about Cheniere Energy, Inc. (NYSE:LNG) in its Q3 2021 investor letter:
“Cheniere Energy is an energy infrastructure company that owns and operates U.S. liquefied natural gas (LNG) export facilities. Strong quarterly results and the disclosure of capital allocation policies were positively received by the markets. In addition, continued supply and demand tightness in the LNG market created a favorable commodity price environment.”
1. Icahn Enterprises L.P. (NASDAQ:IEP)
Icahn Capital LP’s Stake Value: $12,746,974,000
Percentage of Icahn Capital LP’s 13F Portfolio: 57.18%
Number of Hedge Fund Holders: 3
Carl Icahn is the chairman and controlling stakeholder of Icahn Enterprises L.P. (NASDAQ:IEP), an American conglomerate that focuses its investments across multiple sectors including energy, automotive, food packaging, metals, real estate, and home fashion.
Securities filings for Q4 2021 reveal that Carl Icahn owns over 257 million shares of Icahn Enterprises L.P. (NASDAQ:IEP), worth $12.7 billion, representing 57.18% of the total 13F holdings. Icahn’s hedge fund boosted its stake in the company by 5% in Q4 2021. Apart from Icahn Capital LP, Murray Stahl’s Horizon Asset Management and Ken Griffin’s Citadel Investment Group were bullish on Icahn Enterprises L.P. (NASDAQ:IEP) in the December quarter.
In 2021, Icahn Enterprises L.P. (NASDAQ:IEP)’s revenue for the year was $11.20 billion, up from $6.15 billion in the preceding year. The net loss in 2021 came in at $604 million, compared to the 2020 loss of $1.62 billion.
You can also take a look at 10 Best Stocks to Buy Now According to Billionaire David Harding and 10 Best Stocks to Buy Now According to Billionaire Nicholas Pritzker’s Tao Capital.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Favorite Stocks of Billionaire Izzy Englander
- 10 Favorite Stocks of Dan Loeb’s Third Point
- 10 Stocks to Buy in April According to Jim Cramer
Disclosure: None. 10 Favorite Stocks of Activist Billionaire Carl Icahn is originally published on Insider Monkey.
