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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.

Carl Icahn was also one of the most highly paid hedge fund managers in 2010. Icahn is an activist investor – in other words, when he buys positions, they are sizable enough to allow him a voice in the operations of the business. He is a significant shareholder at almost 2 dozen corporations. From such positions, Icahn has been able to affect the fates of several companies.

Icahn has been so successful as an activist investor that when he revealed a 5.8% stake in Chesapeake Energy (NYSE:CHK) the stock jumped 3%. In fact, his strategy is strong enough that he was able to produce high double digit returns for 2010 and 2009, returning 15.2% and 33.3% respectively, and boasting returns of 106.9% since 2004, in spite of periodic market crashes. Even now, with the market being so volatile, Icahn’s top stock picks has returned -8% since the end of last quarter, compared to the S&P 500’s -10.6%. Icahn has also been shorting the SPY to hedge his portfolio, so his actual returns are much higher.

Company

Ticker

Value (x1000)

Return Since June

ICAHN ENTERPRISES L P

IEP

3407245

-9%

MOTOROLA SOLUTIONS INC

MSI

1762975

-12%

FEDERAL MOGUL CORP

FDML

1717773

-31%

CLOROX CO

CLX

843000

0%

FOREST LABS INC

FRX

782702

-15%

MOTOROLA MOB

MMI

738466

71%

LIONS GATE ENTERTAINMENT

LGF

295530

11%

AMERICAN RAILCAR INDUSTRIES

ARII

271179

-28%

VECTOR GROUP LTD

VGR

250751

4%

HAIN CELESTIAL GROUP INC

HAIN

237875

-5%

MENTOR GRAPHICS CORP

MENT

206501

-12%

AMYLIN PHARMACEUTICALS

AMLN

192143

-21%

DYNEGY INC DEL

DYN

111681

-39%

TAKE TWO INTERACTIVE SOFTWR

TTWO

111630

-21%

OSHKOSH CORP

OSK

72332

-37%

Icahn’s position in Motorola Mobility Holdings, Inc. (NYSE:MMI) returned an impressive 71% since the end of June. The position in the communications company is Icahn’s sixth largest and is actually an activist position. Jonathon Jacobson (Highfields Capital Management) is also a fan of Motorola. Icahn also earned a decent return via his position in Lions Gate Entertainment Corp (NYSE:LGF); he gained 11%. Mark Rachesky (MHR Fund Management) and Ken Griffin (Citadel Investment Group) are also big fans of the movie entertainment company. Rachesky owns a $266 million position in the company. Icahn’s other best performing stock picks were IEP, CLX, VGR, and HAIN. He recently started a proxy fight to replace Clorox’s board. He wants to sell the company for at least $78 per share.

Icahn’s largest losses since June have been in Dynegy Inc.; he lost 39% in the electric services company. Douglas Hirsch of Seneca Capital owns a similar stake in Dynegy. Icahn also lost big through his position in Oshkosh Corp (NYSE:OSK), losing 37% since the end of last quarter. The loss is significant but things may turn around for Oshkosh. Alexander Roepers (Atlantic Investment Management) increased his position in the company by 83% last quarter, while Joshua Friedman and Mitchell Julis (Canyon Capital Advisors) increased their position by 160% last quarter.

We like Icahn. He has an impressive track record and, even now when things are really up and down in the world markets, he is still out performing the S&P 500. Moreover, his investment strategy is easy to follow. Icahn buys large stakes, instead of spreading his position over hundreds of different companies and, because these positions are so large, he has to report the transaction within days. This makes it easy for individual investors to mirror Icahn’s top picks. He is definitely a hedge fund manager to watch.

Source: Carl Icahn's Top Stock Picks