In this article, we discuss the top 10 stock picks of billionaire Carl Icahn.
Carl Icahn is an American billionaire investor, activist shareholder, and hedge fund manager. He is best known for Icahn Enterprises L.P. (NASDAQ:IEP), a New York-based holding company with interests vested in the energy, automotive, food packaging, metals, real estate, home fashion, and pharmaceutical sectors. Icahn is an activist investor who takes positions in companies that he believes have potential, and then uses his controlling share to change the corporate policies for the benefit of stakeholders. Carl Icahn is one of the first activist shareholders to manage a hedge fund via that investment strategy.
Icahn graduated from Princeton University in 1957, and his financial career began with Dreyfus Corporation in 1961. Icahn is known for his hostile takeover attempts via purchasing large stakes that company management teams, and was reputed as a corporate raider. He has been openly critical of passive investing. In 2011, Icahn returned funds to investors in his hedge fund, Icahn Capital LP, and now he only invests his personal wealth in his portfolio.
Over the years, Icahn has invested in blue chip stocks including Netflix, Inc. (NASDAQ:NFLX), Apple Inc. (NASDAQ:AAPL), and Lyft, Inc. (NASDAQ:LYFT). He was also a major participant in eBay Inc. (NASDAQ:EBAY)’s corporate spin off of PayPal Holdings, Inc. (NASDAQ:PYPL) in 2014. Billionaire Carl Icahn’s 13F portfolio from the third quarter is concentrated in the information technology, energy, industrials, and consumer discretionary sectors.
The most notable stocks in Carl Icahn’s Q3 portfolio include Icahn Enterprises L.P., FirstEnergy Corp. (NYSE:FE), Cheniere Energy, Inc. (NYSE:LNG), and Occidental Petroleum Corporation (NYSE:OXY), among others discussed in detail below.
Our Methodology
We used the Q3 portfolio of Carl Icahn to select his top 10 stock picks. To elaborate further on each company, we mentioned the Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock.
Billionaire Carl Icahn Portfolio: Top Stock Picks
10. Xerox Holdings Corporation (NASDAQ:XRX)
Carl Icahn’s Stake Value: $628,148,000
Percentage of Carl Icahn’s 13F Portfolio: 2.78%
Number of Hedge Fund Holders: 35
Xerox Holdings Corporation (NASDAQ:XRX) is an American company offering print and digital document products and services across 160 companies. Xerox Holdings Corporation’s product portfolio includes office printers, projectors, digital presses, and other office equipment. Xerox Holdings Corporation is a new arrival in Carl Icahn’s Q3 portfolio, with the billionaire holding over 31 million shares in the company, worth $628.1 million, representing 2.78% of his total investments from the third quarter.
At the end of September this year, 35 hedge funds were bullish on Xerox Holdings Corporation, with total stakes amounting to $987 million. This is compared to 25 funds in the preceding quarter, with stakes worth $1.11 billion.
Xerox Holdings Corporation posted its Q3 results on October 26. EPS in the period amounted to $0.48, beating estimates by $0.05. The $1.76 billion quarterly revenue was down 0.51% year-over-year, missing estimates by $48.05 million.
In addition to Icahn Enterprises L.P., FirstEnergy Corp., Cheniere Energy, Inc., and Occidental Petroleum Corporation, Xerox Holdings Corporation is a notable stock in Carl Icahn’s Q3 portfolio.
9. FirstEnergy Corp. (NYSE:FE)
Carl Icahn’s Stake Value: $675,632,000
Percentage of Carl Icahn’s 13F Portfolio: 2.99%
Number of Hedge Fund Holders: 38
Headquartered in Ohio, FirstEnergy Corp. is an electric utility company that is engaged in electricity generation, transmission and distribution, energy management, and other energy-related services. With 16,000 megawatts electricity generation capacity, FirstEnergy Corp. serves around 6 million customers. Icahn holds a $675.6 million stake in FirstEnergy Corp. as of Q3 2021, which accounts for 2.99% of his total investments.
FirstEnergy Corp. announced Q3 earnings on October 28, posting an EPS of $0.85, beating estimates by $0.06. The $3.21 billion revenue for the quarter was up 3.38% from the prior-year quarter, outperforming estimates by $12.51 million.
Wells Fargo analyst Neil Kalton on November 2 upgraded FirstEnergy Corp. to Equal Weight from Underweight with a price target of $42, up from $40, stating that settlements with a few parties alleviated several concerns about the company’s long-term earnings capacity.
At the end of the third quarter, 38 hedge funds in the database of Insider Monkey were long FirstEnergy Corp., holding stakes worth $1.47 billion. This is comparable to 36 funds in the preceding quarter, with total stakes amounting to $1.70 billion.
8. Herc Holdings Inc. (NYSE:HRI)
Carl Icahn’s Stake Value: $734,718,000
Percentage of Carl Icahn’s 13F Portfolio: 3.26%
Number of Hedge Fund Holders: 24
Herc Holdings Inc. (NYSE:HRI) is an equipment lending company, operating in the United States and Canada, renting and leasing industrial equipment to private companies and government contractors for construction, manufacturing plants, refineries, and petrochemical operations. Carl Icahn, as of Q3 2021, holds a $734.71 million stake in Herc Holdings Inc., which represents 3.26% of his total 13F securities.
Out of the 867 hedge funds monitored by Insider Monkey in the third quarter, 24 hedge funds reported owning stakes in Herc Holdings Inc., worth $1.53 billion. This is compared to 20 funds in the preceding quarter, with total stakes worth $10.7 billion.
Herc Holdings Inc., on October 21, posted its Q3 earnings. EPS in the period totaled $2.38, beating estimates by $0.02. The quarterly revenue equaled $550.40 million, up 20.52% year-over-year, but missing estimates by $1.66 million.
Herc Holdings Inc. reported on October 21 that it would establish the payment of a quarterly dividend of $0.50, with the first dividend payment made on November 4.
7. Cloudera Inc. (NYSE:CLDR)
Carl Icahn’s Stake Value: $835,668,000
Percentage of Carl Icahn’s 13F Portfolio: 3.71%
Number of Hedge Fund Holders: 29
Cloudera Inc. (NYSE:CLDR) is an enterprise cloud services company, helping customers access and analyze on premises data, as well as data across public and private clouds, offering flexibility in operations and high-speed performance. Carl Icahn owns 53.32 million shares in Cloudera Inc. as of September, worth $835.66 million, representing 3.71% of his total investments.
It was reported on October 8 that Cloudera Inc. was acquired by affiliates of Clayton, Dubilier & Rice, an American private equity company, and KKR & Co. Inc. (NYSE:KKR) in an all cash transaction valued at approximately $5.3 billion. As a result, Cloudera Inc. is no longer listed on the New York Stock Exchange.
In Q3 2021, 29 hedge funds in Insider Monkey’s database of elite funds were bullish on Cloudera Inc., holding stakes worth $1.64 billion. This is comparable to 34 funds in the preceding quarter, with a total stake value of approximately $1.37 billion.
One of the leading stakeholders of Cloudera Inc. is Israel Englander’s Millennium Management, owning almost 7 million shares valued at $111.7 million at the end of September.
Here is what ClearBridge Investments has to say about Cloudera, Inc. in its Q1 2021 investor letter:
“Cloudera, in the IT sector, provides software to manage and analyze data. The traditionally on-premise data lake company with a blue chip client base has recently added cloud capabilities, which should stem client churn, increase workloads at existing customers, and add new clients, with the potential to reaccelerate revenue growth from the high single digits to 15%-20%.”
6. Bausch Health Companies Inc. (NYSE:BHC)
Carl Icahn’s Stake Value: $949,940,000
Percentage of Carl Icahn’s 13F Portfolio: 4.21%
Number of Hedge Fund Holders: 39
Bausch Health Companies Inc. (NYSE:BHC) is a multinational pharmaceutical company producing branded generic drugs for skin diseases, gastrointestinal disorders, eye health, and neurology. Bausch Health Companies Inc. stock represents 4.21% of Icahn’s Q3 investments, with the billionaire holding over 34 million shares in the company, worth $949.9 million.
John Paulson’s Paulson & Co is one of the leading stakeholders of Bausch Health Companies Inc., holding a position worth approximately $720 million in the company as of September this year. Overall, 39 hedge funds tracked by Insider Monkey were long Bausch Health Companies Inc. in the third quarter, down from 45 funds in the previous quarter.
On November 2, Bausch Health Companies Inc. announced its Q3 results, posting an EPS of $1.15, beating estimates by $0.08. The quarterly revenue equaled $2.11 billion, down 1.26% from the prior-year quarter, missing estimates by $41.53 million.
JPMorgan analyst Chris Schott kept an Overweight rating on Bausch Health Companies Inc. with a $38 price target on November 3, stating that the company offers an attractive risk/reward combination at current share levels.
In addition to Icahn Enterprises L.P., FirstEnergy Corp., Cheniere Energy, Inc., and Occidental Petroleum Corporation, Bausch Health Companies Inc. is a notable stock in Carl Icahn’s Q3 portfolio.
Here is what Miller Value Partners said about Bausch Health Companies Inc. 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 disclosing 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.”
5. Newell Brands Inc. (NASDAQ:NWL)
Carl Icahn’s Stake Value: $967,620 ,000
Percentage of Carl Icahn’s 13F Portfolio: 4.29%
Number of Hedge Fund Holders: 26
Newell Brands Inc. (NASDAQ:NWL), one of the top stock picks of Carl Icahn from the third quarter, is an American distributor of consumer and commercial products like stationery, writing implements, baby products, fragrances, and home appliances, among other items. Newell Brands Inc. sells a number of brands under its domain. Carl Icahn owns a $967.6 million position in the company as of Q3 2021, which accounts for 4.29% of his total investments.
Pzena Investment Management is one of the leading Newell Brands Inc. stakeholders from the third quarter, holding 26.1 million shares worth $579.2 million. Overall, of the 867 hedge funds tracked by Insider Monkey in Q3, 26 funds were long Newell Brands Inc., up from 25 funds in the preceding quarter.
Newell Brands Inc., on October 29, announced earnings for Q3. The company posted a $0.54 EPS, beating estimates by $0.04. The revenue came in at $2.79 billion, up 3.26% year-over-year, exceeding estimates by $5.9 million.
JPMorgan analyst Andrea Teixeira on November 1 upgraded Newell Brands Inc. to Overweight from Neutral with a price target of $27, up from $26, which provides an 18% potential upside.
4. CVR Energy, Inc. (NYSE:CVI)
Carl Icahn’s Stake Value: $1,186,171,000
Percentage of Carl Icahn’s 13F Portfolio: 5.26%
Number of Hedge Fund Holders: 16
CVR Energy, Inc. (NYSE:CVI) is a Texas-based holding company engaged in petroleum refining and the nitrogen fertilizer manufacturing business via its subsidiaries. Billionaire Carl Icahn, as of September 2021, holds over 71 million shares in CVR Energy, Inc., worth $1.18 billion, accounting for 5.26% of his Q3 investments.
CVR Energy, Inc. announced on November 1 its Q3 results. EPS in the period totaled -$0.24, missing estimates by -$0.22. The $1.88 billion revenue exceeded estimates by $150.85 million.
Due to macro headwinds and limited upside potential associated with the stock, Credit Suisse analyst Manav Gupta on October 27 downgraded CVR Energy, Inc. to Underperform from Neutral with a price target of $20, up from $19.
The Q3 database of Insider Monkey reported that 16 hedge funds were long CVR Energy, Inc., with total stakes amounting to $1.24 billion. Encompass Capital Advisors is one of the leading stakeholders of the company in the third quarter, with an $8.72 million position.
3. Occidental Petroleum Corporation (NYSE:OXY)
Carl Icahn’s Stake Value: $1,331,110,000
Percentage of Carl Icahn’s 13F Portfolio: 5.91%
Number of Hedge Fund Holders: 60
Carl Icahn decreased his stake in Occidental Petroleum Corporation by 9% in the third quarter, holding 45 million shares worth $1.33 billion in the company. The stock accounts for 5.91% of his Q3 13F securities. Occidental Petroleum Corporation is a Houston-based hydrocarbon exploration and petrochemical manufacturing company, with operations in multiple countries.
One of the leading Occidental Petroleum Corporation stakeholders from the third quarter is Rajiv Jain’s GQG Partners, holding 19.85 million shares valued at $587.2 million. Overall, 60 hedge funds tracked by Insider Monkey were long Occidental Petroleum Corporation, up from 57 funds in the previous quarter.
On November 4, Occidental Petroleum Corporation reported earnings for Q3, posting an EPS of $0.87, beating estimates by $0.21. The quarterly revenue totaled $6.82 billion, up almost 108% year-over-year, outperforming estimates by $247.24 million.
Mizuho analyst Silvio Micheloto on November 30 raised the price target on Occidental Petroleum Corporation to $50 from $48 and kept a Buy rating on the shares, citing rising global demand and prices for oil.
Here is what Smead Capital Management has to say about Occidental Petroleum Corporation 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)
Carl Icahn’s Stake Value: $1,579,188,000
Percentage of Carl Icahn’s 13F Portfolio: 7.01%
Number of Hedge Fund Holders: 49
Cheniere Energy, Inc., a liquified natural gas company from Houston, is one of the top stock picks of Carl Icahn from the third quarter, with the billionaire owning more than 16 million shares in Cheniere Energy, Inc., worth $1.57 billion, representing 7.01% of his Q3 portfolio.
Cheniere Energy, Inc., on November 4, reported its Q3 results. EPS in the quarter equaled -$4.23, missing estimates by -$5.50. The revenue totaled $3.20 billion, missing estimated revenue by $547.43 million.
On November 17, Mizuho analyst Robert Mosca initiated coverage of Cheniere Energy, Inc. with a Buy rating and a $122 price target. The analyst expects Cheniere Energy, Inc. to benefit from the lucrative market opportunities before the gas backdrop normalizes.
At the end of Q3, 49 hedge funds in the database of elite funds maintained by Insider Monkey reported owning stakes in Cheniere Energy, Inc., worth $3.1 billion. This is compared to the same number of funds in the preceding quarter, holding total stakes valued at $2.9 billion.
Michael Lowenstein’s Kensico Capital is one of the leading stakeholders of Cheniere Energy, Inc., holding a $341 million position in the company at the end of September.
Here is what Horizon Kinetics has to say about Cheniere Energy, Inc. in its Q3 2021 investor letter:
“Cheniere Energy, from this list, shows our time frame approach in action. The share price is up very substantially from when we initially bought it 2 ½ years ago, and it reaches new all-time highs almost monthly. The stock dropped by 50% early last year, and the entire return occurred this year. You might think, ‘Ok, 3 years, excellent performance, that’s it.’ That’s not why we bought it. We bought a certain business model, a value development pattern on a massive dormant asset, and a valuation discount.
We bought Cheniere because it was exceedingly cheap as it transitioned from a development stage operating company stage, having just turned profitable a year after completing its basic plant construction and selling its first shipload of liquified natural gas (LNG): 2017 loss of $(390) million vs. 2018 earnings of $470 million…” (Click here to see the full text)
1. Icahn Enterprises L.P. (NASDAQ:IEP)
Carl Icahn’s Stake Value: $12,343,750,000
Percentage of Carl Icahn’s 13F Portfolio: 54.8%
Number of Hedge Fund Holders: 4
Icahn Enterprises L.P. is an American conglomerate founded by Carl Icahn, who owns 95% of the company’s stock. The enterprise has vested interests in the energy, automotive, food packaging, metals, real estate, and home fashion sectors. Carl Icahn holds a $12.34 billion position in Icahn Enterprises L.P., which accounts for 54.8% of his total investments. Icahn Enterprises L.P. is the largest holding in the billionaire’s portfolio for the third quarter, with Icahn increasing his stake by 4% as of September this year.
Icahn Enterprises L.P., on November 2, reported earnings for Q3. The GAAP EPS totaled -$0.55, missing estimates by -$0.66. The $2.65 billion revenue outperformed revenue estimates by $18 million.
Murray Stahl’s Horizon Asset Management is one of the 4 hedge funds that were long Icahn Enterprises L.P. in the third quarter, holding 561,214 shares in the company, worth $28 million.
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This article is originally published at Insider Monkey.
