Carl Icahn’s 2022 Portfolio: 9 Value Stock Picks

In this article, we will look at 9 value stock picks of billionaire Carl Icahn.

Carl Icahn is one of the most prominent figures in the hedge fund industry. He is dubbed as the “corporate raider” due to his activist shareholder strategies which have proven of success for him in the past. Mr. Icahn is an alumnus of Princeton University, where he went for his undergraduate studies in philosophy. As of this May, Forbes estimates Mr. Icahn’s real-time net worth to value at $15.9 billion, making him rank 106 on the Billionaires 2022 list.

Carl Icahn’s Investment Career

In 1961, Carl Icahn began his investment career as a junior stockbroker at Dreyfus Corporation. Later on, he went to work in the options division at Tessel, Patrick & Co., and shortly afterward he led the options department at Gruntal & Co. in 1964. In 1968, Mr. Icahn founded Icahn & Co., his first lone venture which focused on risk arbitrage and options trading.

Carl Icahn’s Investment Strategies

Carl Icahn brought activist shareholder strategies to mainstream popularity in the mid-1980s, after a successful hostile takeover of Trans World Airlines. One of the most notable quotes from the billionaire is:

“My investment philosophy, generally, with exceptions, is to buy something when no one wants it.”

Mr. Icahn has been known to identify undervalued stocks with book values that exceed the current market valuation. Once the billionaire identifies undervalued companies, he works to purchase a majority interest in the equity in an effort to overthrow the board or initiate asset stripping to drive shareholder returns.

Carl Icahn’s Portfolio

As of the first quarter of 2022, Icahn Capital has a top ten holdings concentration of 97.13% with investments across a diverse range of sectors including industrial goods, utilities, healthcare, finance, and technology, among others. As of March 31, Mr. Icahn manages more than $21.86 billion in 13F securities through Icahn Capital. The fund’s most prominent holdings include Bausch Health Companies (NYSE:BHC), Cheniere Energy, Inc. (NYSE:LNG), and FirstEnergy Corp. (NYSE:FE).

Our Methodology

To come up with the top value stock picks of billionaire Carl Icahn, we did a comprehensive assessment of Icahn Capital’s Q1 2022 investment portfolio. We identified companies with low price-to-earnings ratio, and narrowed down our selection to stocks that had a forward PE ratio of less than 15.

Along with each stock, we mentioned the analyst and investor sentiment for it. We believe both metrics to be critical indicators when considering investments in stocks.

The hedge fund sentiment was derived from Insider Monkey’s database, which as of the first quarter of 2022, tracks over 900 elite hedge funds.

With this context in mind, let’s dive into the 9 value stock picks of billionaire investor Carl Icahn.

Carl Icahn’s 2022 Portfolio: 9 Value Stock Picks

9. Delek US Holdings, Inc. (NYSE:DK)

Icahn Capital’s Stake Value: $28,416,000

Percentage of Icahn Capital’s 13F Portfolio: 0.12%

PE Ratio as of May 31: 7.81

Number of Hedge Fund Holders: 24

Delek US Holdings, Inc. (NYSE:DK) engages in the integrated downstream energy business in the United States. The company operates through three business segments: Refining, Logistics, and Retail. The stock is one of the top value stocks to buy according to Carl Icahn. As of March 31, Icahn Capital’s stakes in Delek US Holdings, Inc. are valued at $28.41 million, which accounts for 0.12% of its investment portfolio.

This May, Delek US Holdings, Inc. posted results for the fiscal first quarter of 2022. The company reported earnings per share of $0.58 and beat estimates by $0.72. The company’s revenues came in at $4.46 billion, up 86.40% year over year, and outperformed market consensus by $1.64 billion. Moreover, as of May 31, Delek US Holdings, Inc. has gained 84.31% over the past six months and has a PE ratio of 7.81.

On May 23, Piper Sandler analyst Ryan Todd raised his price target on Delek US Holdings, Inc. to $41 from $34 and reiterated an Overweight rating on the shares.

At the close of Q1 2022, 24 hedge funds held stakes in Delek US Holdings, Inc. worth $184.06 million. This is compared to 17 positions in the previous quarter with stakes worth $208.63 million.

8. SandRidge Energy, Inc. (NYSE:SD)

Icahn Capital’s Stake Value: $77,198,000

Percentage of Icahn Capital’s 13F Portfolio: 0.35%

PE Ratio as of May 31: 7.89

Number of Hedge Fund Holders: 25

SandRidge Energy, Inc. (NYSE:SD) engages in the acquisition, development, and production of oil and natural gas in the United States. As of March 31, Carl Icahn’s hedge fund owns over 4.81 million shares of the company which amounts to a stake of $77.19 million. The investment covers 0.35% of Icahn Capital’s 13F portfolio and ranks SandRidge Energy, Inc. fifteenth among its top holdings.

On May 4, SandRidge Energy, Inc. reported earnings for the fiscal first quarter of 2022. The company reported earnings per share of $0.95 and generated revenues of $57.48 million, up 71% year over year. Moreover, as of May 31, the stock has surged by 320.89% over the past twelve months and has a forward PE ratio of 7.89.

By the end of the first quarter of 2022, 25 hedge funds were long SandRidge Energy, Inc.. These funds held collective stakes of roughly $160 million dollars, up from $107.8 million in the previous quarter with 20 positions. The hedge fund sentiment for the stock is positive.

Icahn Capital has significant stakes in SandRidge Energy, Inc.. Other prominent companies part of Carl Icahn’s 13F portfolio are Bausch Health Companies, Cheniere Energy, Inc., and FirstEnergy Corp..

7. Conduent Incorporated (NYSE:CNDT)

Icahn Capital’s Stake Value: $196,851,000

Percentage of Icahn Capital’s 13F Portfolio: 0.9%

PE Ratio as of May 31: 13.88

Number of Hedge Fund Holders: 30

Conduent Incorporated (NYSE:CNDT) is a leading provider of business process services that offer capabilities in transaction-intensive processing, analytics, and automation in the United States, Europe, and internationally. This May, Conduent Incorporated reported earnings for the fiscal first quarter of 2022 in which it beat EPS by $0.04. The company reported earnings per share of $0.10 and generated revenues of $967 million, missing revenue expectations by $3.75 million.

Conduent Incorporated is one of the best undervalued stocks to buy according to billionaire Carl Icahn. As of May 31, Conduent Incorporated has a forward price-to-earnings ratio of 13.88. Icahn Capital’s stakes in the company were valued at $196.85 million at the end of this March, which represents 0.9% of Carl Icahn’s 13F portfolio.

By the end of the first quarter of 2022, 30 hedge funds held stakes in Conduent Incorporated worth $290.27 million. This is compared to 27 positions in the fourth quarter of 2021 with stakes worth $274.78 million. The hedge fund sentiment for the stock is positive.

Curreen Capital, an investment management firm, mentioned Conduent Incorporated in its first-quarter 2022 investor letter. Here is what the firm said:

“We sold Conduent in the quarter, after each business reported disappointing results. When businesses perform worse than expected, there are always a lot of mitigating factors, or “buts”. But the business is great. But this dynamic management team is doing the right things for long-term growth. But the price is down, surely it’s cheap here. And of course there are more emotional buts… But I have told people that this business is great. But what if I sell at the bottom? But I am a long term investor. But, but, but… ‘Cut the weeds and water the flowers’ introduces clarity, almost a ruthless clarity, that tips the scales away from the “buts”. In the long run—though not in every case—cutting the weeds and watering the flowers improves both my thinking and our results. Our Weeds: Conduent. At Conduent, results were weak and suggest that the company’s turnaround has stalled. My hypothesis had been that Conduent’s turnaround would continue, driving higher earnings and ultimately a higher stock price. I like the management, the valuation was inexpensive, and the company’s return to its strategy of selling off business segments may generate value for shareholders. But we owned Conduent because it was turning around, and with that stalled, I did not want to own the business. We sold our shares at $4.247.”

6. Dana Incorporated (NYSE:DAN)

Icahn Capital’s Stake Value: $251,014,000

Percentage of Icahn Capital’s 13F Portfolio: 1.14%

PE Ratio as of May 31: 12.28

Number of Hedge Fund Holders: 20

Dana Incorporated (NYSE:DAN) provides power-conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America, and the Asia Pacific. It is one of the top undervalued stocks held by Icahn Capital. As of March 31, Icahn Capital owns over 14.28 million shares of Dana Incorporated which amounts to a stake value of $251.01 million. The investment covers 1.14% of Carl Icahn’s 13F portfolio.

On April 27, Dana Incorporated released earnings for the fiscal first quarter of 2022 in which it beat both EPS and revenue estimates. The company reported earnings per share of $0.16 and outperformed EPS estimates by $0.03. Dana Incorporated generated revenues of $2.48 billion, up 9.59% year over year, and beat Wall Street consensus by $236.09 million.

Shortly after the company’s earnings release, Deutsche Bank analyst Emmanuel Rosner trimmed his price target on Dana Incorporated to $18 from $21 but reiterated a Buy rating on the shares.

By the end of the first quarter of 2022, 20 hedge funds were long Dana Incorporated with stakes of $441.03 million. This is compared to 16 positions in the prior quarter with stakes of $536.75 million.

5. Herc Holdings Inc. (NYSE:HRI)

Icahn Capital’s Stake Value: $672,177,000

Percentage of Icahn Capital’s 13F Portfolio: 3.07%

PE Ratio as of May 31: 9.93

Number of Hedge Fund Holders: 25

Herc Holdings Inc. (NYSE:HRI) operates as an equipment rental supplier in the United States and internationally. Not only is the stock undervalued, but the company is also a dividend player. As of May 31, Herc Holdings Inc. has a forward PE ratio of 9.93 and a trailing-twelve-month dividend yield of 1.36%. On May 13, the company’s board of directors declared a quarterly cash dividend of $0.575 per share. The dividend is payable on June 10 to investors of record at the close of business on May 27.

This April, Herc Holdings Inc. announced earnings for the fiscal first quarter of 2022. The company registered an EPS of $1.95 but missed estimates by $0.01. The company’s revenues came in at $567.30 million, up 25.01% year over year, and beat expectations by $14.53 million.

On April 22, Baird analyst Mircea Dobre lowered his price target on Herc Holdings Inc. to $158 from $161 and maintained a Neutral rating on the shares.

At the close of the first quarter of 2022, 25 hedge funds were bullish on Herc Holdings Inc. with collective stakes of $1.41 billion. This is compared to 27 hedge funds in the previous quarter with stakes of $1.36 billion.

Just like Bausch Health Companies, Cheniere Energy, Inc., and FirstEnergy Corp., Icahn Capital has significant stakes in Herc Holdings Inc., making the stock rank seventh among its top 13F holdings.