Impressions From Billionaire Carl Icahn’s Discussion At The DealBook Conference

Icahn also mentioned his most up-to-date corporate campaign on American International Group Inc. (NYSE:AIG). Just recently, the activist investor sent a letter to AIG’s CEO Peter Hancock, saying that the company would greatly benefit from splitting its insurance businesses into three independent public companies. The CEO recently said that a potential split would result in significant expenses, but would also divert the company from implementing its cost-cutting efforts. Icahn said that he would meet the CEO this week in order to discuss their thoughts on the proposed split. John Paulson of Paulson & Co., another major shareholder of American International Group Inc. (NYSE:AIG), is also an advocate of a split and reckons that AIG’s share price could reach a price level of greater than $100 per share should the company make this move.

Icahn also briefly discussed his energy bets, including Chesapeake Energy Corporation (NYSE:CHK), Transocean LTD (NYSE:RIG) and CVR Energy Inc. (NYSE:CVI), suggesting that he is bullish on the energy sector overall. The investor is currently losing money in Chesapeake, and Transocean “will lose a lot of money”, but his portfolio was not hit overly hard by the sluggish energy sector because “CVR worked out” for him and his team. He also added that “I don’t really mind them going down, because I know in my mind that I am going to buy more of them. I am waiting to buy more of these oil companies”, Icahn said.

On a final note, Carl Icahn considers Apple Inc. (NASDAQ:AAPL) to be “the greatest company in the world”, mentioning its cheap valuation. Of course, the shares of the tech giant seem to be trading quite cheaply at the moment if considering its trailing P/E ratio of 13.32, compared to the median of 22.65 for the companies included in the S&P 500 index. Even so, Apple’s current valuation seems to reflect the concerns about its high reliance on iPhone sales, which may not go away until Apple adds another killer revenue stream to complement it’s iPhone revenue stream (or more aptly, raging river).

Disclosure: None