In the last three months, notorious activist investor Carl Icahn made several interesting points about Apple Inc. (NASDAQ:AAPL), supporting a bullish case for the company. Last week, Carl Icahn was a guest on a Wall Street Week episode, where he talked about activist investing, provided his take on the current market situation and yes, mentioned some interesting points about Apple.
“I am very concerned about the market,”Icahn said. The investor considers that the market is moving up in a zero-interest rate environment, but the economic news isn’t very optimistic and earnings “aren’t good” also. Icahn added that he expects a correction, therefore he is heavily hedging his portfolio. Aside from the stock market, what also worries the investor is the high-yield ‘junk’ bond market. “I think it’s ridiculously high,” he said. One of the reasons for this growth is that the public keeps investing in high-yield funds, betting on the yields to keep growing. However, when the yields will start falling, there will be a great “run for the exits,” as Icahn put it.
Another point that Icahn talked about during the interview is activist investing. The key to successful activism is to find a company that has great assets, but for some reason doesn’t make any money and often this reason is a CEO who is incapable of generating value for shareholders. Therefore, one of Icahn’s main objectives when he goes activist is to force the company to increase its shareholder value for all investors. However, currently there are many other investors who claim that they are activist and create a lot of noise around a stock, often insisting that they will push for a sale of the company and then dump their shares once the stock jumps on the back of this news.
Nevertheless, Icahn hedges its long exposure and often goes activist when he finds a company that requires a push in order to maximize its value, but when it comes to Apple Inc. (NASDAQ:AAPL), Icahn said that he is feeling very secure about this stock. In fact, he added that he is not worried about it and when it declines, he prefers to buy more shares.