Icahn Capital LP is the investment arm of the Icahn Enterprises established by the famous business guru Carl Icahn. Icahn began his career in 1961 as a registered representative at Dreyfus & Company where he learned about options and convertible assets. In 1968, he started his own brokerage firm Icahn & Co. Inc. Icahn is the chairman of Icahn Enterprises, which has various businesses under its wings including investment management, real estate, consumer goods and metals. Legendary corporate raider Carl Icahn is one of the most active and successful hedge fund managers in 2011. In March Carl Icahn announced that he will be returning $1.76 billion back to his investors. We wrote an article saying that we believe Icahn is still bullish about the market.
Carl Icahn is a very smart man and following his moves in the market could have made investors a lot of money. For instance on December 20th, Carl Icahn revealed a 5.8% stake in Chesapeake Energy (CHK) and CHK immediately jumped 3%. However, that wasn’t the end of it. Even if you have waited till the last day of trading in 2010 and bought CHK at the close, your return could have been nearly 30% in less than three months. Carl Icahn got what he wanted from CHK in less than three months and he sold 91% of his stake by the end of March.
Carl Icahn’s stock picks returned 10% since the end of March, vs. 2% for the S&P 500 index. During the first quarter of 2011, he sold out his entire stake in Candence Design Systems Inc. (CDNS), Masco Corp. (MAS) and Navistar International Corp. (NAV). The stocks underperformed the market as Masco Corp. lost 16.5% and Navistar lost 22.6%. Here are Carl Icahn’s top holdings at the end of March:
Company Name | Ticker | Value | Return |
MOTOROLA SOLUTIONS INC | 1369024 | 0% | |
BIOGEN IDEC INC | 943810 | 44% | |
GENZYME CORP | GENZ | 798052 | 0% |
CLOROX CO | 700700 | 7% | |
MOTOROLA MOB | MMI | 654031 | 1% |
LIONS GATE ENTERTAINMENT | 223210 | 13% | |
MENTOR GRAPHICS CORP | 188672 | -20% | |
HAIN CELESTIAL GROUP INC | 184140 | 4% | |
LAWSON SOFTWARE | 172775 | -7% | |
AMYLIN PHARMACEUTICALS | AMLN | 163522 | 20% |
TAKE TWO INTERACTIVE SOFTWR | 151310 | -8% | |
REGENERON PHARMACEUTICALS | 109837 | 28% | |
DYNEGY INC DEL | 82128 | 0% | |
CHESAPEAKE ENERGY CORP | 65529 | 3% | |
COMMERCIAL METALS CO | 63778 | -14% | |
CYBERONICS INC | 61380 | -8% | |
MATTEL INC | 60468 | 9% | |
AMGEN INC | 54519 | 3% | |
FOREST LABS INC | 53372 | 19% | |
ENZON PHARMACEUTICALS | 51490 | -6% | |
N R G ENERGY INC | 51198 | 15% | |
EXELIXIS INC | 26635 | -23% | |
SOUTHERN UNION CO | 5328 | 55% |
Icahn had six stock picks that returned more than 10% in a flat market. Biogen was his second largest position with $944 Million invested at the end of March. The stock gained more than 42% since the end of March 31st 2011. Jim Simons’ Renaissance and Cliff Asness’ AQR are also among the hedge funds that are bullish about Biogen (See Jim Simons’ favorite stock picks).
Icahn purchased 186,156 shares of Southern Union Co. worth approximately $5.33 million. The investment returned 55% since March. The increase is a result of Energy Transfer Equity purchasing Southern Union Co for $4.2 billion. Michael Lowenstein’s Kensico Capital has the largest position in the company with approximately 6.27 million shares (Check out Michael Lowenstein’s top stock picks).
Clorox Co. was the largest new purchase during the first quarter. At the end of March, Carl Icahn had $700 million in CLX. Last week, he offered to take the company private as he believes Procter & Gamble (PG), Unilever (UL), Colgate-Palmolive, etc. may buy the company for more than $100 per share. Clorox gained 6.9% since the end of March. Icahn Capital has the largest position in the company among 300+ hedge funds we are tracking. John Rogers’ Ariel Investments and Ken Griffin’s Citadel also have relatively small positions in CLX (See Ken Griffin’s favorite stocks).
Icahn has managed to beat the market by eight percentage points since March 2011. We believe investors can imitate his impressive stock picks and beat the market in the long-run.
Disclosure: I am long CHK.
