Here's What Billionaire Value Hunter Carl Icahn Is Buying

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today let's look at investing giant Carl Icahn, who has made billions, partly by taking large positions in companies and pushing for change in them. These companies have included Texaco, RJR Nabisco, and Imclone. He's also drawn to companies in or near bankruptcy, wanting to make them more valuable in order to sell them at a higher price.

Icahn Associates' reportable stock portfolio totaled $21.5 billion in value as of June 30. Its top three holdings, Icahn Enterprises L.P., CVR Energy, and Dell (UNKNOWN: DELL.DL  ) make up nearly 60% of the overall portfolio's value. Chesapeake Energy (NYSE: CHK  ) was among the top three last quarter, but is now in fifth place. It's finally under new management, The shale gas leader has been shedding assets to help it pay down debt, while also aiming to boost production. It's poised to profit from rising natural gas prices, and may also profit from the practice of multi-well pad drilling.

Another high-profile Icahn holding is Herbalife (NYSE: HLF  ) , which has been given a buy rating and an $80 price target by analysts at Argus Research, thanks in part to its solid earnings. (The stock was trading in the mid-$60s recently.) The company has been the subject of great controversy among hedge-fund giants, with Bill Ackman calling it a pyramid scheme. In recent Herbalife news, it seems that William Stiritz, CEO of cereal giant Post Holdings, has become the company's fourth-largest shareholder.

Interesting developments
So what does Icahn Associates' latest quarterly 13F filing tell us? Here are a few interesting details:

Icahn Associates neither initiated nor closed out positions in any stocks. Among holdings in which Icahn Associates increased its stake were Dell, Nuance Communications (NASDAQ: NUAN  ) , and CVR Refining (NYSE: CVRR  ) . His Dell stake represents more than 9% of his assets, and some shareholders welcome his interest in stopping management's plans to take the company private, though some shareholder advocacy organizations are in favor of it. Even more recently, it seems that Icahn has taken a stake in Apple, with investors disagreeing about what he might accomplish there.

Nuance is a major developer of speech-recognition software, with its technology is housed in many iDevices (think "Siri"). It has been seen as a buyout candidate, and with Icahn having gobbled up many shares, the company recently swallowed a "poison pill," limiting takeover possibilities. While some see the stock as undervalued now, others are bailing on the company, not liking its recent performance or its CEO's compensation package. The company's future is quite uncertain.

CVR Refining, a Master Limited Partnership, offers a fat double-digit dividend yield (recently near 20%!), and one that's "variable," meaning that it will fluctuate along with the fortunes of the company. Refiners are facing regulations that require substantial financial investments, and those like CVR with less access to export markets than others are poised to experience some pain. It's also vulnerable to oil prices and spreads.

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing, and 13F forms can be great places to find intriguing candidates for our portfolios.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 04, 2013, at 7:06 PM, GMoneyCaps wrote:

    value hunter or serial stock manipulator?

  • Report this Comment On September 04, 2013, at 7:27 PM, winnerli wrote:

    Follow the wise man. you get wiser. I follow his portfolio closely. Here is his full portfolio:

    http://relationalstocks.com//instshow.php?op=summary&id=...

  • Report this Comment On September 05, 2013, at 1:01 AM, DZPM wrote:

    FCS is > God short sell candidate

    Fairchild Semiconductor International Inc.'s earnings have declined to an estimated $0.16 from $0.49 over the past 5 quarters; they have shown deceleration in quarterly growth rates when adjusted for the volatility of earnings. This is an indication of weakness that could lead to declining earnings.

    FCS seems highly valued with the highest PEG value in the Semiconductors & Semiconductor Equipment industry of 104.3551, which is supported by a PE of 521.7755 that is also the highest in the industry.

    The prior quarter Operating Margin of 1.50% is less than the TTM Operating Margin of 7.85%.

    Balance Sheet Strength: n The Long-Term Debt/Capital is 15.57%. This indication of financial leverage measures the extent of a firm’s capital that is provided by lenders. Below 25% reflects well on a company’s financial stability. The average LT Debt/Capital for this Industry Group (Electr. Semi.) is 11.21%. Growth Potential: n The prior quarter EPS of $-0.06 is less than the EPS of the year over year quarter of $0.02. n The prior quarter EPS growth rate of -400.00% is smaller than the TTM EPS growth rate of -41.97%. n The TTM EPS growth rate of -41.97% is less than the TTM Sales Per Share (SPS) growth rate of -0.08%. n Earnings Trend is Negative for the last three quarters on a year over year basis. FCS is nothing but a SELL

    Nothing new! Federal Reserve comity and Ben Bernanke “Giant Ponzi Scheme” .When we have bad economic data market is going up on speculation Fed Chairman Ben S. Bernanke will kip printing money. When we have god economic data market is going up speculation Bernanke is steel printing? This entire look like exuberance sign of market is in the crash mod and will burst 1000 down ward point any second. There is no exist without big consequences Bernanke know that and kip printing money we all American will go down to drain. Either way he will finish as slowly anyway. Bernanke ruin billions and billions of ordinary people’s lives with kipping interest zero in favor of Banks and Speculators Bernanke committed the biggest crime to humanity The Biggest Ponzi Scheme Ever. Bernanke is a Scam bag! Communist was using seam principals like Fed > Bernanke (printing money for ever), and day collapsed next is USA to Collapse, because off sociopath Bernanke. Printing money is poor pyramid scams, artificial unreal! Stock and everything is doom for crash. Every pyramid scam crash everybody loses regular investor watch out doesn’t fall in to the trap.

    A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.

    That's according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.

    "I think we are heading for a worse economic crisis than we had in 2007," Schiff said. "You're going to have a collapse in the dollar...a huge spike in interest rates... and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it."

    Schiff says that, despite "phony" signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed's never ending money printing.

    Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That's about $85 billion per month against a budget deficit that is about the same level.

    According to Schiff, these numbers are unsustainable. And the Fed has no credible "exit strategy."

    Eventually interest rates will rise... and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

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