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Billionaire Carl Icahn Portfolio: Top 10 Stock Picks

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·9 min read
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In this article, we discuss the top 10 stock picks of billionaire Carl Icahn. If you want to skip our detailed analysis of Icahn’s history, investment philosophy, and hedge fund performance, go directly to Billionaire Carl Icahn Portfolio: Top 5 Stock Picks.

Carl Icahn is an American billionaire investor, activist shareholder, and hedge fund manager. He is best known for Icahn Enterprises L.P. (NASDAQ:IEP), a New York-based holding company with interests vested in the energy, automotive, food packaging, metals, real estate, home fashion, and pharmaceutical sectors. Icahn is an activist investor who takes positions in companies that he believes have potential, and then uses his controlling share to change the corporate policies for the benefit of stakeholders. Carl Icahn is one of the first activist shareholders to manage a hedge fund via that investment strategy.

Icahn graduated from Princeton University in 1957, and his financial career began with Dreyfus Corporation in 1961. Icahn is known for his hostile takeover attempts via purchasing large stakes that company management teams, and was reputed as a corporate raider. He has been openly critical of passive investing. In 2011, Icahn returned funds to investors in his hedge fund, Icahn Capital LP, and now he only invests his personal wealth in his portfolio.

Over the years, Icahn has invested in blue chip stocks including Netflix, Inc. (NASDAQ:NFLX), Apple Inc. (NASDAQ:AAPL), and Lyft, Inc. (NASDAQ:LYFT). He was also a major participant in eBay Inc. (NASDAQ:EBAY)’s corporate spin off of PayPal Holdings, Inc. (NASDAQ:PYPL) in 2014. Billionaire Carl Icahn’s 13F portfolio from the third quarter is concentrated in the information technology, energy, industrials, and consumer discretionary sectors.

Billionaire Carl Icahn Portfolio: Top 10 Stock Picks
Billionaire Carl Icahn Portfolio: Top 10 Stock Picks

The most notable stocks in Carl Icahn’s Q3 portfolio include Icahn Enterprises L.P. (NASDAQ:IEP), FirstEnergy Corp. (NYSE:FE), Cheniere Energy, Inc. (NYSE:LNG), and Occidental Petroleum Corporation (NYSE:OXY), among others discussed in detail below.

Our Methodology

We used the Q3 portfolio of Carl Icahn to select his top 10 stock picks. To elaborate further on each company, we mentioned the Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock.

Billionaire Carl Icahn Portfolio: Top Stock Picks

10. Xerox Holdings Corporation (NASDAQ:XRX)

Carl Icahn’s Stake Value: $628,148,000

Percentage of Carl Icahn’s 13F Portfolio: 2.78%

Number of Hedge Fund Holders: 35

Xerox Holdings Corporation (NASDAQ:XRX) is an American company offering print and digital document products and services across 160 companies. Xerox Holdings Corporation (NASDAQ:XRX)’s product portfolio includes office printers, projectors, digital presses, and other office equipment. Xerox Holdings Corporation (NASDAQ:XRX) is a new arrival in Carl Icahn’s Q3 portfolio, with the billionaire holding over 31 million shares in the company, worth $628.1 million, representing 2.78% of his total investments from the third quarter.

At the end of September this year, 35 hedge funds were bullish on Xerox Holdings Corporation (NASDAQ:XRX), with total stakes amounting to $987 million. This is compared to 25 funds in the preceding quarter, with stakes worth $1.11 billion.

Xerox Holdings Corporation (NASDAQ:XRX) posted its Q3 results on October 26. EPS in the period amounted to $0.48, beating estimates by $0.05. The $1.76 billion quarterly revenue was down 0.51% year-over-year, missing estimates by $48.05 million.

In addition to Icahn Enterprises L.P. (NASDAQ:IEP), FirstEnergy Corp. (NYSE:FE), Cheniere Energy, Inc. (NYSE:LNG), and Occidental Petroleum Corporation (NYSE:OXY), Xerox Holdings Corporation (NASDAQ:XRX) is a notable stock in Carl Icahn's Q3 portfolio.

9. FirstEnergy Corp. (NYSE:FE)

Carl Icahn’s Stake Value: $675,632,000

Percentage of Carl Icahn’s 13F Portfolio: 2.99%

Number of Hedge Fund Holders: 38

Headquartered in Ohio, FirstEnergy Corp. (NYSE:FE) is an electric utility company that is engaged in electricity generation, transmission and distribution, energy management, and other energy-related services. With 16,000 megawatts electricity generation capacity, FirstEnergy Corp. (NYSE:FE) serves around 6 million customers. Icahn holds a $675.6 million stake in FirstEnergy Corp. (NYSE:FE) as of Q3 2021, which accounts for 2.99% of his total investments.

FirstEnergy Corp. (NYSE:FE) announced Q3 earnings on October 28, posting an EPS of $0.85, beating estimates by $0.06. The $3.21 billion revenue for the quarter was up 3.38% from the prior-year quarter, outperforming estimates by $12.51 million.

Wells Fargo analyst Neil Kalton on November 2 upgraded FirstEnergy Corp. (NYSE:FE) to Equal Weight from Underweight with a price target of $42, up from $40, stating that settlements with a few parties alleviated several concerns about the company’s long-term earnings capacity.

At the end of the third quarter, 38 hedge funds in the database of Insider Monkey were long FirstEnergy Corp. (NYSE:FE), holding stakes worth $1.47 billion. This is comparable to 36 funds in the preceding quarter, with total stakes amounting to $1.70 billion.

8. Herc Holdings Inc. (NYSE:HRI)

Carl Icahn’s Stake Value: $734,718,000

Percentage of Carl Icahn’s 13F Portfolio: 3.26%

Number of Hedge Fund Holders: 24

Herc Holdings Inc. (NYSE:HRI) is an equipment lending company, operating in the United States and Canada, renting and leasing industrial equipment to private companies and government contractors for construction, manufacturing plants, refineries, and petrochemical operations. Carl Icahn, as of Q3 2021, holds a $734.71 million stake in Herc Holdings Inc. (NYSE:HRI), which represents 3.26% of his total 13F securities.

Out of the 867 hedge funds monitored by Insider Monkey in the third quarter, 24 hedge funds reported owning stakes in Herc Holdings Inc. (NYSE:HRI), worth $1.53 billion. This is compared to 20 funds in the preceding quarter, with total stakes worth $10.7 billion.

Herc Holdings Inc. (NYSE:HRI), on October 21, posted its Q3 earnings. EPS in the period totaled $2.38, beating estimates by $0.02. The quarterly revenue equaled $550.40 million, up 20.52% year-over-year, but missing estimates by $1.66 million.

Herc Holdings Inc. (NYSE:HRI) reported on October 21 that it would establish the payment of a quarterly dividend of $0.50, with the first dividend payment made on November 4.

7. Cloudera Inc. (NYSE:CLDR)

Carl Icahn’s Stake Value: $835,668,000

Percentage of Carl Icahn’s 13F Portfolio: 3.71%

Number of Hedge Fund Holders: 29

Cloudera Inc. (NYSE:CLDR) is an enterprise cloud services company, helping customers access and analyze on premises data, as well as data across public and private clouds, offering flexibility in operations and high-speed performance. Carl Icahn owns 53.32 million shares in Cloudera Inc. (NYSE:CLDR) as of September, worth $835.66 million, representing 3.71% of his total investments.

It was reported on October 8 that Cloudera Inc. (NYSE:CLDR) was acquired by affiliates of Clayton, Dubilier & Rice, an American private equity company, and KKR & Co. Inc. (NYSE:KKR) in an all cash transaction valued at approximately $5.3 billion. As a result, Cloudera Inc. (NYSE:CLDR) is no longer listed on the New York Stock Exchange.

In Q3 2021, 29 hedge funds in Insider Monkey’s database of elite funds were bullish on Cloudera Inc. (NYSE:CLDR), holding stakes worth $1.64 billion. This is comparable to 34 funds in the preceding quarter, with a total stake value of approximately $1.37 billion.

One of the leading stakeholders of Cloudera Inc. (NYSE:CLDR) is Israel Englander’s Millennium Management, owning almost 7 million shares valued at $111.7 million at the end of September.

Here is what ClearBridge Investments has to say about Cloudera, Inc. (NYSE:CLDR) in its Q1 2021 investor letter:

“Cloudera, in the IT sector, provides software to manage and analyze data. The traditionally on-premise data lake company with a blue chip client base has recently added cloud capabilities, which should stem client churn, increase workloads at existing customers, and add new clients, with the potential to reaccelerate revenue growth from the high single digits to 15%-20%.”

6. Bausch Health Companies Inc. (NYSE:BHC)

Carl Icahn’s Stake Value: $949,940,000

Percentage of Carl Icahn’s 13F Portfolio: 4.21%

Number of Hedge Fund Holders: 39

Bausch Health Companies Inc. (NYSE:BHC) is a multinational pharmaceutical company producing branded generic drugs for skin diseases, gastrointestinal disorders, eye health, and neurology. Bausch Health Companies Inc. (NYSE:BHC) stock represents 4.21% of Icahn’s Q3 investments, with the billionaire holding over 34 million shares in the company, worth $949.9 million.

John Paulson’s Paulson & Co is one of the leading stakeholders of Bausch Health Companies Inc. (NYSE:BHC), holding a position worth approximately $720 million in the company as of September this year. Overall, 39 hedge funds tracked by Insider Monkey were long Bausch Health Companies Inc. (NYSE:BHC) in the third quarter, down from 45 funds in the previous quarter.

On November 2, Bausch Health Companies Inc. (NYSE:BHC) announced its Q3 results, posting an EPS of $1.15, beating estimates by $0.08. The quarterly revenue equaled $2.11 billion, down 1.26% from the prior-year quarter, missing estimates by $41.53 million.

JPMorgan analyst Chris Schott kept an Overweight rating on Bausch Health Companies Inc. (NYSE:BHC) with a $38 price target on November 3, stating that the company offers an attractive risk/reward combination at current share levels.

In addition to Icahn Enterprises L.P. (NASDAQ:IEP), FirstEnergy Corp. (NYSE:FE), Cheniere Energy, Inc. (NYSE:LNG), and Occidental Petroleum Corporation (NYSE:OXY), Bausch Health Companies Inc. (NYSE:BHC) is a notable stock in Carl Icahn’s Q3 portfolio.

Here is what Miller Value Partners said about Bausch Health Companies Inc. (NYSE:BHC) in its Q1 2021 investor letter:

“Bausch Health Companies (BHC) climbed 55% during the period. Glenview (6% owner) sent a letter to the company in early February arguing the company has not acted to unlock shareholder value and urging the company to sell its eye care business. Shortly after, activist investor Carl Icahn disclosing a 7.83% stake in the company. The company responded to the filing saying that they remain committed to splitting the business into two parts, but are open to pursuing all opportunities. The company reported strong 4Q results with better-than-expected 2021 guidance. 4Q revenue came in at $2,213M slightly ahead of consensus of $2,165M and EPS of $1.34 beat consensus of $1.12. The company guided for 2021 revenue of $8.6-8.8B coming in ahead of expectations of $8.55B with EBITDA of $3.4-3.55B ahead of $3.46B estimated. The company announced the transition of Paul Herendeen to an advisory role to be succeeded by Sam Eldessouky, previously senior vice president, controller and chief accounting officer. Finally, the company announced the sale of Amoun Pharmaceutical for $740M, which was relatively in line with estimates and should help support debt reduction targets ahead of the planned spin-off of Bausch + Lomb eye care business.”

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Disclosure: None. Billionaire Carl Icahn Portfolio: Top 10 Stock Picks is originally published on Insider Monkey.