In this article, we will look at 10 best stocks to buy according to billionaire Carl Icahn.
Carl Icahn is an American billionaire investor and hedge fund manager of Icahn Capital, a New-York based investment management firm that manages equity and fixed income portfolios. He was among the pioneering activist shareholders and made it a popular investing strategy in the hedge fund industry. As of this May, Mr. Icahn’s real-time net worth estimated by Forbes sits around $15.9 billion, placing him at number 43 on the Forbes 400 2021 list and 106 on the Billionaires 2022 list.
Carl Icahn began his career in finance in 1961 at Dreyfus Corporation, where he was a stockbroker. Two years later, he took up his role as an options manager for Tessel, Patrick & Co., shortly after which he moved to Gruntal & Co. where he led the options department until 1968. In 1968, Mr. Icahn gathered a sum of roughly $0.5 million and founded Icahn & Co., which grew to become Icahn Capital. As of the first quarter of 2022, the legendary billionaire investor manages over $21.86 billion in 13F securities through Icahn Capital.
Carl Icahn’s Investment Philosophy
Carl Icahn is a contrarian investor and he has a unique investment approach, which has helped him make enormous profits and gain prominence in the hedge fund industry. Mr. Icahn earned the title “corporate raider” in the 1980s after he successfully acquired Trans World Airlines and divested its assets, pocketing a profit of roughly $469 million. Mr. Icahn is known for launching hostile takeovers and engaging in a buying frenzy to overpower the management of companies on his radar. Mr. Icahn builds his strategies on top of extensive market research and identifies companies that are undervalued. Carl Icahn has reportedly said:
“We’re not about liquidating companies, but if you do that, why is that terrible? We’re not blowing up the factories. The person who buys it should be able to make the asset more productive.”
Carl Icahn’s 13F Portfolio
As of the first quarter of 2022, Icahn Capital has a top ten holdings concentration of 97.13%, with the majority of its investments across the industrial goods and utilities segments. Among Icahn Capital’s most notable holdings we see Bausch Health Companies (NYSE:BHC), Cheniere Energy, Inc. (NYSE:LNG), and FirstEnergy Corp. (NYSE:FE).
Our Methodology
To determine the 10 best stocks to buy according to billionaire Carl Icahn, we did an assessment of Icahn Capital’s Q1 2022 investment portfolio. We picked the top ten 13F holdings of the hedge fund and ranked them in increasing order of stake. Along with each stock, we included the hedge fund sentiment and analyst rating for it. The hedge fund sentiment was derived from Insider Monkey’s database, which as of Q1 2022 tracks more than 900 elite hedge funds.
Let’s look at the 10 best stocks to buy according to billionaire Carl Icahn.
10 Best Stocks to Buy According to Billionaire Carl Icahn
10. Dana Incorporated (NYSE:DAN)
Icahn Capital’s Stake Value: $251,014,000
Percentage of Icahn Capital’s 13F Portfolio: 1.14%
Number of Hedge Fund Holders: 20
Dana Incorporated (NYSE:DAN) is a leading American supplier of power-conveyance and energy-management solutions for electrified vehicles and machinery in North America, Europe, South America, and the Asia Pacific. This April, Dana Incorporated posted results for the fiscal first quarter of 2022. The company registered an EPS of $0.16, outperforming expectations by $0.03. The company reported revenues of $2.48 billion, up 9.59% year over year, beating Wall Street estimates by $236.09 million.
As of March 31, Icahn Capital owns over 14.28 million shares of Dana Incorporated which brings its stakes in the company to $251.01 million. It is one of the best stocks to buy according to billionaire Carl Icahn.
This April, Deutsche Bank analyst Emmanuel Rosner trimmed his price target on Dana Incorporated to $18 from $21 but reiterated a Buy rating on the shares following the company’s earnings release.
At the close of the first quarter of 2022, 20 hedge funds held stakes in Dana Incorporated worth $441.03 million. This is compared to 16 hedge funds in the previous quarter with stakes of $536.75 million.
9. Welbilt, Inc. (NYSE:WBT)
Icahn Capital’s Stake Value: $264,821,000
Percentage of Icahn Capital’s 13F Portfolio: 1.21%
Number of Hedge Fund Holders: 31
Welbilt, Inc. (NYSE:WBT) designs, develops, and supplies foodservice equipment for the commercial foodservice market worldwide. It is one of the best stocks to buy according to billionaire Carl Icahn. As of March 31, Icahn Capital’s stakes in Welbilt, Inc. are valued at $264.82 million, which represents 1.21% of Carl Icahn’s 13F portfolio.
On May 10, Welbilt, Inc. posted results for the fiscal first quarter of 2022. The company registered an EPS of $0.10 and missed expectations by $0.10. Welbilt, Inc. reported revenues of $333 million, up 5.11% year over year from $316.80 million, missing expectations by $13.80 million.
According to Insider Monkey’s database, at the end of the first quarter of 2022, 31 hedge funds were long Welbilt, Inc. with stakes worth $1.09 billion. This is compared to 35 positions in the previous quarter with stakes of $1.07 billion.
Like Bausch Health Companies, Cheniere Energy, Inc., and FirstEnergy Corp., billionaire investor Carl Icahn is also bullish on Welbilt, Inc..
8. Xerox Holdings Corporation (NYSE:XRX)
Icahn Capital’s Stake Value: $647,757,000
Percentage of Icahn Capital’s 13F Portfolio: 2.96%
Number of Hedge Fund Holders: 25
Xerox Holdings Corporation (NYSE:XRX) is a workplace technology company that designs, develops, and sells document management systems and solutions in the United States, Europe, Canada, and internationally. On April 21, Xerox Holdings Corporation announced earnings for the fiscal first quarter of 2022. The company reported a loss per share of $0.12 and missed estimates by $0.25. Xerox Holdings Corporation generated revenues of $1.67 billion, down 2.46% year over year, but outperformed market consensus by $34.67 million.
This April, Citi analyst Jim Suva lowered his price target on Xerox Holdings Corporation to $15 from $17 and reiterated a Sell rating on the shares.
As of March 31, Icahn Capital owns 32.11 million shares of Xerox Holdings Corporation, which brings its stake in the company to $647.75 million. The investment covers 2.96% of Carl Icahn’s 13F portfolio. It is one of the best stocks to buy according to billionaire Carl Icahn.
Insider Monkey found 25 hedge funds bullish on Xerox Holdings Corporation at the end of Q1 2022. The collective stakes of these hedge funds were valued at $817.49 million. This is compared to 23 positions in the prior quarter with stakes worth $969.88 million.
7. Herc Holdings Inc. (NYSE:HRI)
Icahn Capital’s Stake Value: $672,177,000
Percentage of Icahn Capital’s 13F Portfolio: 3.07%
Number of Hedge Fund Holders: 25
Herc Holdings Inc. (NYSE:HRI) is a leading global equipment rental supplier. On April 21, Herc Holdings Inc. announced earnings for the fiscal first quarter of 2022. The company generated revenues of $567.30 million, up 25.01% year over year, beating estimates by $14.53 million. Herc Holdings Inc. reported earnings per share of $1.95 but missed estimates by $0.01.
This April, Baird analyst Mircea Dobre slashed his price target on Herc Holdings Inc. to $158 from $161 and reiterated a Neutral rating on the shares.
As of March 31, Icahn Capital’s stakes in Herc Holdings Inc. are valued at $672.17 million. The investment covers 3.07% of Carl Icahn’s 13F portfolio. The stock is among the top ten holdings of Icahn Capital.
This May, Herc Holdings Inc. declared a quarterly cash dividend of $0.575 per share. The dividend is payable on June 10 to shareholders of record on May 27. As of May 31, Herc Holdings Inc. has a trailing-twelve-month dividend yield of 1.36%.
At the end of Q1 2022, 25 hedge funds were bullish on Herc Holdings Inc.. The total stakes of these hedge funds were valued at $1.41 billion. This is compared to 27 hedge funds in the previous quarter with stakes worth $1.36 billion.
6. Newell Brands Inc. (NYSE:NWL)
Icahn Capital’s Stake Value: $708,038,000
Percentage of Icahn Capital’s 13F Portfolio: 3.23%
Number of Hedge Fund Holders: 31
Newell Brands Inc. (NYSE:NWL) is a leading American supplier of consumer and commercial products worldwide. This April, Newell Brands Inc. released earnings for the fiscal first quarter of 2022. The company reported earnings per share of $0.36, beating estimates by $0.09. Moreover, the company generated revenues of $2.39 billion, up 4.37% year over year, and beat market consensus by $109.54 million.
This May, Newell Brands Inc. announced that its board of directors have declared a quarterly cash dividend of $0.23 per share. The common stock cash dividend is payable on June 15 to investors of record at the close of business on May 31. As of May 31, the stock has a forward dividend yield of 4.20%.
As of Q1 2022, Icahn Capital’s stakes in Newell Brands Inc. are worth $708.03 million, which covers 3.23% of Carl Icahn’s 13F portfolio. It is the sixth-best stock to buy according to billionaire Carl Icahn.
On March 30, JPMorgan analyst Andrea Teixeira slashed her price target on Newell Brands Inc. to $26 from $29 and maintained an Overweight on the shares.
At the close of Q1 2022, 31 hedge funds held stakes in Newell Brands Inc. worth $1.64 billion. This is compared to 26 positions in the previous quarter with stakes of $1.74 billion.
Among the top 13F holdings of Icahn Capital, we have Newell Brands Inc. Bausch Health Companies, Cheniere Energy, Inc., and FirstEnergy Corp..
5. Bausch Health Companies (NYSE:BHC)
Icahn Capital’s Stake Value: $793,378,000
Percentage of Icahn Capital’s 13F Portfolio: 3.62%
Number of Hedge Fund Holders: 48
Bausch Health Companies Inc. manufactures and sells a range of pharmaceutical, medical device, and over-the-counter (OTC) products. This May, Bausch Health Companies Inc. posted earnings for the fiscal first quarter of 2022. The company registered an EPS of $0.72, missing estimates by $0.30. The company generated revenues of $1.92 billion and missed consensus by $121.51 million.
This May, BMO Capital analyst Gary Nachman cut his price target on Bausch Health Companies Inc. to $15 from $26 but maintained a Market Perform rating on the shares.
As of March 31, Icahn Capital’s stake in Bausch Health Companies Inc. is valued at $793.37 million. The investment covers 3.62% of Carl Icahn’s 13F portfolio, making Bausch Health Companies Inc. rank fifth among the fund’s top 13F holdings. It is one of the best stocks to buy according to billionaire Carl Icahn.
At the end the first quarter of 2022, 48 hedge funds were bullish on Bausch Health Companies with stakes worth $3.17 billion. This is compared to 53 positions in the fourth quarter of 2021, with stakes worth $3.86 billion.
4. FirstEnergy Corp. (NYSE:FE)
Icahn Capital’s Stake Value: $869,861,000
Percentage of Icahn Capital’s 13F Portfolio: 3.97%
Number of Hedge Fund Holders: 33
FirstEnergy Corp. generates, transmits, and distributes electricity in the United States. The company owns and operates coal-fired, nuclear, hydroelectric, natural gas, wind, and solar power generating facilities. As of March 31, Icahn Capital’s stakes in FirstEnergy Corp. are valued at $869.86 million, which covers 3.97% of its investment portfolio. FirstEnergy Corp. is among the best stocks to buy according to billionaire Carl Icahn.
This April, Credit Suisse analyst Nicholas Campanella initiated coverage of FirstEnergy Corp with an Outperform rating and a $51 price target.
Insider Monkey spotted FirstEnergy Corp. on 33 hedge fund portfolios at the end of the first quarter of 2022. The total stakes of these hedge funds were valued at $1.88 billion, up from $1.75 billion in the previous quarter with 40 positions. The hedge fund sentiment for this stock is positive.
ClearBridge Investments, an investment management firm, mentioned FirstEnergy Corp. in its “Global Infrastructure Income Strategy” fourth-quarter 2021 investor letter. Here is what the firm said:
“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.”
3. Cheniere Energy, Inc. (NYSE:LNG)
Icahn Capital’s Stake Value: $1,348,037,000
Percentage of Icahn Capital’s 13F Portfolio: 6.16%
Number of Hedge Fund Holders: 62
As of March 31, Icahn Capital owns more than 9 million shares of Cheniere Energy, Inc. which bring the fund’s stakes to $1.34 billion. The investment covers 6.16% of Carl Icahn’s investment portfolio, making it rank among the top 5 holdings of his hedge fund.
On May 4, Cheniere Energy, Inc. announced earnings for the fiscal first quarter of 2022. The company reported earnings per share of $7.53, outperforming Wall Street consensus by $3.87. The company generated revenues of $7.48 billion, up 142.20% year over year, beating revenue consensus by $1.92 billion.
This May, RBC Capital analyst Elvira Scotto raised her price target on Cheniere Energy, Inc. to $178 from $151 and maintained an Outperform rating on the shares. The analyst sees the company as well-positioned to benefit from the growing global demand for liquefied natural gas.
At the close of Q1 2022, 62 hedge funds were bullish on Cheniere Energy, Inc. with stakes worth $3.20 billion. This is compared to 52 positions in the preceding quarter with stakes worth $3.38 billion.
Here is what ClearBridge Investments had to say about Cheniere Energy, Inc. in its third-quarter 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.”
2. CVR Energy, Inc. (NYSE:CVI)
Icahn Capital’s Stake Value: $1,818,415,000
Percentage of Icahn Capital’s 13F Portfolio: 8.31%
Number of Hedge Fund Holders: 17
CVR Energy, Inc. (NYSE:CVI) is the second-best stock to buy according to billionaire Carl Icahn. As of March 31, Icahn Capital owns more than 71 million shares of CVR Energy, Inc. which amounts to a stake of $1.81 billion. The investment represents 8.31% of Carl Icahn’s investment portfolio.
This May, CVR Energy, Inc. released earnings for the fiscal first quarter of 2022. The company generated revenues of $2.37 billion, up 62.20% year over year, beating revenue consensus by $547.76 million. Moreover, CVR Energy, Inc. registered an EPS of $0.02 but missed estimates by $0.02.
This May, JPMorgan analyst Phil Gresh raised his price target on CVR Energy, Inc. to $32 from $26 and maintained an Underweight rating on the shares.
At the close of the first quarter of 2022, 17 hedge funds were long CVR Energy, Inc. with stakes of $1.88 billion. This is compared to 13 hedge funds in the preceding with stakes worth $1.23 billion.
1. Icahn Enterprises LP (NASDAQ:IEP)
Icahn Capital’s Stake Value: $13,348,465,000
Percentage of Icahn Capital’s 13F Portfolio: 61.04%
Number of Hedge Fund Holders: 4
Icahn Enterprises LP (NASDAQ:IEP) is an industrial conglomerate that has operations in investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. As of March 31, Icahn Capital owns more than 257.04 million shares of the company which amounts to a stake value of $13.34 billion. The investment covers 61.04% of Carl Icahn’s 13F portfolio.
On May 6, Icahn Enterprises LP reported earnings for the fiscal first quarter of 2022 in which it beat both EPS and revenue expectations. The company registered an EPS of $1.06, beating Wall Street estimates by $0.93. Icahn Enterprises LP generated quarterly revenues of $4.08 billion, up 20.69% year over year, beating revenue consensus by $1.81 billion.
By the end of the first quarter of 2022, 4 hedge funds were long Icahn Enterprises LP with stakes of $13.37 billion. This is compared to 3 positions in the previous quarter with stakes of $12.78 billion. The hedge fund sentiment for Icahn Enterprises LP is positive.
You can also take a look at 10 Best Stocks to Buy Under $30 According to Bruce Kovner’s Caxton Associates and 10 Best Stocks To Buy Under $10 According To Hedge Funds.
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This article is originally published at Insider Monkey.
