This article is part of a series that provides an ongoing analysis of the changes made to Carl Icahn's 13F portfolio on a quarterly basis. It is based on Icahn's regulatory 13F Form filed on 2/12/2021. Please visit our Tracking Carl Icahn's Portfolio series to get an idea of his investment philosophy and our previous update for the fund's moves during Q3 2020.
This quarter, Icahn's 13F portfolio value increased ~16% from $17.37B to $20.06B. The number of holdings increased from 16 to 18. The portfolio is very concentrated with the largest five positions accounting for ~79% of the entire holdings: Icahn Enterprises (NASDAQ:IEP), Occidental Petroleum (OXY), CVR Energy (CVI), Herbalife (HLF), and Cheniere Energy (LNG).
Carl Icahn is best known for building sizable stakes in businesses and then pushing for changes to increase shareholder value. To learn more about his investing style and philosophy check out "King Icahn: The Biography of a Renegade Capitalist."
Note: Icahn's 13F filing is a consolidated report and so should not be viewed as a single portfolio. Specifically, Icahn Enterprises holds several of the businesses and the entities in turn hold Icahn Enterprises. For an idea on the business structure, check-out Icahn Enterprises Investor Presentation (Slide 5).
Bausch Health (BHC) and Dana Inc. (DAN): These are the two new stakes this quarter. The 0.52% of the portfolio BHC position was purchased at prices between ~$15.30 and ~$21 and the stock currently trades well above that range at $31.90. The ~0.4% DAN stake was established at prices between ~$13.25 and ~$20 and the stock currently trades above that range at $23.44.
Note 1: Regulatory filings since the quarter ended show them beneficially owning 27.8M shares (7.8% of the business) of Bausch Health. 22.77M of those shares are through forward purchase agreements. Two new Icahn nominees are joining the board.
Note 2: Regulatory filings since the quarter ended show them owning 10.76M shares (7.45% of the business) of Dana Inc. This is compared to ~4M shares in the 13F report.
Cheniere Energy: LNG is a large (top five) 4.84% portfolio position. The bulk of it was purchased in Q3 2015 at prices between $47.50 and $70.50. Q4 2015 saw a ~15% increase at prices between $36 and $54. There was an about-turn in Q2 2018: ~28% reduction at ~$65. This quarter saw another ~20% selling at prices between ~$46 and ~$61. The stock currently trades at $73.27.
Note: Icahn's ownership stake in the business is ~7%.
Tenneco Inc. (TEN): Tenneco is a small 0.38% portfolio position. It came as partial consideration for the acquisition of Federal-Mogul: Tenneco issued ~5.65M Class A shares and ~23.79M Class B (non-voting) shares. The stock is now at $10.90. Q2 2020 saw a ~62% stake increase at prices between $2.32 and $12.56. There was a ~20% reduction this quarter.
Note: The Class B non-voting shares are not in the 13F report.
Icahn Enterprises: IEP position has seen consistent increases over the years. The position size increased from ~98M shares to ~102M shares in 2013, to ~109M shares in 2014, to ~117M shares in 2015, to ~130M shares in 2016, to ~158M shares in 2017, 175.4M in 2018, 197M in 2019, and 222M shares in 2020. The stock currently trades at $59.66.
Note: IEP Book Value per share is ~$18 per share.
Xerox Corporation (XRX): XRX is a 3.33% of the portfolio position established in Q4 2015 at prices between $24 and $32. This quarter saw a ~17% stake increase. Their overall cost basis is $25.50, and they control ~14.5% of the business. The stock is now at $25.57.
Note 1: Regulatory filings since the quarter ended show them beneficially owning 30.17M shares (15.21% of the business) including forward contracts. This is compared to 27.8M shares in the 13F report.
Note 2: In December 2017, Icahn launched a proxy battle nominating four new board members in an effort to stop the Xerox-Fujifilm deal announced earlier. Last May, Xerox scrapped the deal with Fujifilm in a settlement with Icahn and Darwin Deason (another activist alongside Icahn).
Note 3: Icahn's activism earned him three board seats in 2016. Xerox spun off Conduent (CNDT) and that transaction closed in January 2017. That was followed with a 1:4 stock-split in June. The prices quoted above are adjusted for these two transactions.
Occidental Petroleum and wts: OXY is a top three 7.65% of the portfolio position established in Q2 2019 at ~$52 per share. Q3 2019 saw a ~23% selling at prices between $42 and $53 and that was followed with a ~15% reduction last quarter at prices between $37.25 and $44.50. The pattern reversed in Q2 2020: ~300% stake increase at an average cost of ~$14.60. Last quarter saw the position increased further through the purchase of 19.3M warrants (strike 22, 8/3/2027 expiry) for ~$2.75 per warrant. The stock is now at $29.90. Their overall cost basis is ~$20.50 per share and their beneficial ownership stake is ~11% of the business.
CVR Energy, Inc.: CVI is a top five 4.84% of the 13F portfolio position first purchased in Q4 2011. The bulk of the current position (71.2M shares: ~71% of the whole business) was purchased through a $30 per share tender offer in H1 2012. The stock currently trades at $23.83.
Note 1: Two MLPs were carved out since the 2012 tender: CVR Refining the refining portion and CVR Partners (UAN), the nitrogen fertilizer unit. CVR Energy had majority ownership stake in both. In August 2015, CVR Partners agreed to merge with Rentech Nitrogen. Q2 2018 saw a tender offer whereby new CVR Energy shares were exchanged for CVRR at a valuation of $24.26 per common unit (0.6335 shares of CVI for one CVRR). ~22M new shares were issued.
Note 2: Icahn disclosed that CVI stock including dividends was up ~62% as of EOY2016 from the tender offer at $30. CVI stock was trading at $25.39 at the time. So, his adjusted cost-basis was $15.67 as of that date.
Herbalife: HLF is a large (top five) 4.91% of the 13F portfolio stake first purchased in Q1 2013 in the high-teens price range. Q3 2016 saw a ~15% increase at prices between $29 and $34 and that was followed with a similar increase the following quarter at prices between $24 and $32. Q2 2018 saw the position sold down by ~25% at $52.50 per share. Last August 14.72M shares (~40% of his position of ~35M shares as of last quarter) were sold back to the company at $48.75 per share following Herbalife's self-tender offer. The stock currently trades at $45.82.
Note 1: Regulatory filings show them owning ~8M shares (6.73% of the business). This is compared to 20.5M shares in the 13F report. Around 12.5M shares were sold at ~$48.50 per share.
Note 2: The prices quoted above are adjusted for a 2-for-1 stock-split done in April 2018.
Newell Brands (NWL): NWL is a 4.63% of the portfolio position established in Q1 2018 at a cost-basis of $27.40 per share. The stock is now below that at $23.96. Q2 2018 saw a ~10% stake increase at prices between $23 and $28 and that was followed with a ~15% increase next quarter at prices between $20.50 and $28. Overall, their cost-basis is ~$25.60. Q1 2020 also saw a ~6% stake increase.
Note: In April 2019, rival activist Starboard Value came to an agreement with Carl Icahn whereby they now together control Newell's board.
Navistar International (NAV): NAV is 3.67% of the 13F portfolio long-term position. The last significant activity follows: ~22% increase in Q2 & Q3 2014 at prices between $29 and $38. The stock currently trades at $44.09.
Note: Icahn controls ~17% of the business.
Cloudera (CLDR): The 3.63% of the portfolio position in CLDR was purchased in Q3 2019 at a cost basis of ~$5.41. The stock is currently at $14.96. His ownership interest is just under ~20%. Q2 2020 saw a ~5% trimming.
Note: In August 2019, it was announced that Carl Icahn had reached an agreement with management at Cloudera (CLDR): in exchange to keeping his ownership interest capped at ~20%, he got to nominate two directors to the company's board.
Herc Holdings (HRI): HRI is a small 1.49% of the portfolio position established in Q2 2016 as a result of the spinoff of Herc Holdings from Hertz Global Holdings (HTZ). There was a ~4% stake increase in Q3 2017 at ~$38.50. The stock started trading at ~$33 and currently goes for $85.20.
Note: Icahn controls ~16% of the business.
Conduent Inc. (CNDT): The small 0.91% portfolio stake came about as a result of Conduent's spinoff from Xerox that closed in January 2017. Terms called for Xerox shareholders to receive Conduent shares in the ratio of 1:5. Icahn owned 99M shares of Xerox for which he received 19.8M shares of Conduent. CNDT started trading at ~$15 and currently goes for $6.14. Q2 2019 saw a ~60% stake increase at around $9 per share. That was followed with a ~20% increase in Q4 2019 at ~$6.50 per share.
Note: Their ownership interest in Conduent is at ~18% of the business. In August, Hunter Gray was appointed to the Board of Directors.
Delek US Holdings (DK): DK is a very small 0.84% of the portfolio position purchased at prices between $8.35 and ~$28 and the stock currently trades at $23.89. Icahn has a ~15% ownership stake in the business.
Welbilt, Inc. (WBT) previously Manitowoc Food Service: The very small 0.79% of the portfolio WBT stake was established as a result of the spin-off from Manitowoc. The spin-off terms called for one share of WBT for each share of MTW held. Icahn held 10.58M shares of MTW for which he received the same number of WBT shares. Regular-way trading started in early March 2016 with WBT at $13.41. It currently trades at $15.32 compared to Icahn's overall cost basis of ~$13. There was an ~18% stake increase in Q1 2020.
Note: Icahn controls ~10% of the business.
SandRidge Energy (SD): SD is a 0.07% of the portfolio activist stake established in Q4 2017 at prices between $16 and $21 and the stock is now well below that range at $4.15.
Note: Icahn has a ~13.5% ownership stake in the business. He lobbied the board and succeeded in ending the Bonanza Creek acquisition on December 28, 2017. In June 2018, Icahn gained control of Sandridge's board by winning a proxy battle.
Note: Icahn also owns significant stakes in the following OTC stocks as per latest regulatory filings: ~36M shares (48.6% of business) of Enzon Pharmaceuticals (OTC:ENZN) at a cost basis of ~$2.70, and ~89% of Viskase Companies (OTCPK:VKSC). He is also known to have a position in Fannie (OTCQB:FNMA)/Freddie (OTCQB:FMCC). The Enzon position saw a substantial increase last quarter as they participated in a rights offering.
The spreadsheet below highlights changes to Icahn's 13F stock holdings in Q4 2020:
Source: Created by author with data from Icahn's filing