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Carl Icahn Ups Stake in Business Services Company Conduent

- By Sydnee Gatewood

Carl Icahn (Trades, Portfolio), CEO of Icahn Enterprises LP (IEP), disclosed he boosted his stake in Conduent Inc. (CNDT) by 10.22% on Dec. 3.


According to GuruFocus real-time picks, Icahn picked up 2.28 million shares of Conduent for an average price of $12.82 per share. This brings the total holding to 24.6 million shares, representing roughly 1.22% of the equity portfolio.

GuruFocus estimates the guru has lost 11% on the investment since the first quarter of 2017.

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The New Jersey-based business services company, which was spun off of hardware company Xerox Corp. (XRX) in January 2017, has a $2.8 billion market cap; its shares were trading around $13.35 on Tuesday with a price-book ratio of 0.84 and a price-sales ratio of 0.52. GuruFocus noted that all three of these metrics are near multiyear lows.

Icahn is known for taking activist positions in companies with the hope of turning them around and creating value for shareholders. The guru established his initial stake in Conduent after it was spun off of Xerox, which was one of the companies he was targeting.

As part of the deal, he also obtained three seats on Conduent's board. The company offers customer care, transportation services, health care and digital payment services. Xerox focuses on digital print and technology services.

Year to date, the stock has tumbled approximately 18%.

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The median price-sales chart shows the stock is trading below its historical value.

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On Nov. 7, the company posted adjusted third-quarter earnings of 28 cents per share on $1.3 billion in revenue, which was down from 11.9% from the prior-year quarter. The results lagged estimates made by Zacks Investment Research.

GuruFocus rated Conduent's financial strength 6 out of 10. As a result of poor interest coverage and declining revenue per share, the Altman Z-Score of 1.37 suggests the company is at risk of going bankrupt. The company's profitability and growth scored a 5 out of 10 rating, driven by margins and returns that underperform competitors. The Piotroski F-Score of 6, however, indicates business conditions are stable.

With roughly 10.56% of outstanding shares, Icahn is Conduent's largest guru shareholder. Larry Robbins (Trades, Portfolio), Jim Simons' (Trades, Portfolio) Renaissance Technologies, First Eagle Investment (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Robert Olstein (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Murray Stahl (Trades, Portfolio) and David Dreman (Trades, Portfolio) are also invested in the stock.

Portfolio composition

Icahn's $25.2 billion equity portfolio, which is composed of 20 stocks, is heavily invested in the industrials sector, followed by smaller positions in the energy and consumer defensive sectors.

Other industrial stocks he owns as of the third quarter are Icahn Enterprises, Navistar International Corp. (NAV), American Railcar Industries Inc. (ARII), Hertz Global Holdings Inc. (HTZ), Herc Holdings Inc. (HRI), Welbilt Inc. (WBT) and Manitowoc Co. Inc. (MTW).

Disclosure: No positions.

Read more here:

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  • Carl Icahn: Not Slowing Down at 82


This article first appeared on GuruFocus.