Carl Icahn is an American Business magnate. The 75-year old legendary corporate raider still has no intention to retire. “What else would I do? Play shuffleboard somewhere?” said Icahn after he was questioned whether his announcement of closing his hedge fund was a sign of retirement. Icahn returned $1.76 billion back to his investors, but he will continue investing his own money.
We like Icahn. He is an excellent insider to monkey. As an activist investor, Icahn usually takes moves that are bigger than an average hedge fund’s, and therefore he has to report these stakes more promptly on 13D forms.
Icahn slightly reduced his portfolio value from $11.18 billion at the end of June to $11.14 billion at the end of September. Although the total value of the portfolio was lower, the fund invested in more positions. It had 18 positions at the end of the second quarter and it now has two more positions. Icahn sold out one position over the third quarter. The fund reported to own $296 million worth of Lions Gate Entertainment Corp (LGF) at the end of the second quarter. Unfortnately, LGF returned 23.48% since the end of September, outperforming the SPY.
Company | Ticker | Value | Activity |
ICAHN ENTERPRISES L P | 2865256 | 0% | |
MOTOROLA SOLUTIONS INC | 1604445 | 0% | |
MOTOROLA MOB WI | MMI | 1265845 | 0% |
EL PASO CORP | EP | 1153397 | New |
FEDERAL MOGUL CORP | 1120718 | 1% | |
FOREST LABS INC | 803099 | 31% | |
CLOROX CO | 798560 | -4% | |
VECTOR GROUP LTD | 254262 | 5% | |
HAIN CELESTIAL GROUP INC | 217839 | 0% | |
AMERICAN RAILCAR INDUSTRIES | 181647 | 2% | |
MENTOR GRAPHICS CORP | 155077 | 0% | |
OSHKOSH CORP | 136391 | 247% | |
AMYLIN PHARMACEUTICALS INC | AMLN | 132745 | 0% |
COMMERCIAL METALS CO | 109603 | 137% | |
TAKE TWO INTERACTIVE SOFTWR | 92927 | 0% | |
DYNEGY INC DEL | 74334 | 0% | |
WEBMD HEALTH CORP | 65703 | New | |
NAVISTAR INTERNATIONAL | 56713 | New | |
ENZON PHARMACEUTICALS | 41570 | 0% | |
MOTRICITY INC | MOTR | 11462 | 0% |
Icahn’s top three positions are Icahn Enterprises (IEP), Motorola Solutions (MSI) and Motorola Mobility Holdings Inc (MMI). He also increased his position in Oshkosh Corp (OSK) by 247% to $136 million. OSK soared 36.98% since the end of third quarter, beating the market by 27 percentage points.
Over the third quarter, the most notable change in Icahn’s portfolio is the initiation of a brand new $1.15 billion position in El Paso Corp (EP). Icahn made a bundle from this position as EP skyrocketed 41.36% since September 30, beating SPY by a huge margin. Dan Loeb’s Third Point also had $100+ million invested in EP. Another activist investor, Barry Rosenstein, had a $500 million position at the end of second quarter, but he cut the position to $300 million by the end of third quarter.
In addition to EP, Icahn also opened new positions in WebMD Health Corp (WBMD) and Navistar International Corp (NAV). WBMD returned 10.25% and NAV gained 22.01% since the end of the third quarter, both beating the market. These two stocks generated a weighted average return of 15.7%, outperforming SPY by six percentage points.
Icahn also increased his bets in Commercial Metals (CMC), Federal Mogul (FDML), Forest Labs (FRX), Vectr Group (VGR), and American Railcar Industries (ARII). He cut his $800 million stake in Clorox (CLX) by 4% as well. We like Icahn. Most of his new positions and increased positions in the third quarter have strong performance so far. We believe that investors will be able to achieve better-than-market return in the long term by focusing on Icahn Capital’s best stock picks.
Disclosure: I am long SPY.
