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Here is What Hedge Funds Think About Icahn Enterprises LP (IEP)

·6 min read

We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of Icahn Enterprises LP (NASDAQ:IEP) based on that data.

Icahn Enterprises LP (NASDAQ:IEP) investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. Icahn Enterprises LP (NASDAQ:IEP) was in 4 hedge funds' portfolios at the end of September. The all time high for this statistics is 6. Our calculations also showed that IEP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most investors, hedge funds are assumed to be unimportant, outdated financial tools of years past. While there are greater than 8000 funds with their doors open at the moment, Our researchers look at the upper echelon of this club, around 850 funds. These money managers watch over most of the smart money's total capital, and by keeping an eye on their unrivaled stock picks, Insider Monkey has unsheathed a few investment strategies that have historically outstripped the market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Most Popular Stocks Among Hedge Funds
Most Popular Stocks Among Hedge Funds

Carl Icahn of Icahn Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we're going to view the latest hedge fund action surrounding Icahn Enterprises LP (NASDAQ:IEP).

How are hedge funds trading Icahn Enterprises LP (NASDAQ:IEP)?

At third quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IEP over the last 21 quarters. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Is IEP A Good Stock To Buy?
Is IEP A Good Stock To Buy?

According to Insider Monkey's hedge fund database, Carl Icahn's Icahn Capital LP has the biggest position in Icahn Enterprises LP (NASDAQ:IEP), worth close to $10.5343 billion, comprising 60.6% of its total 13F portfolio. The second largest stake is held by Horizon Asset Management, led by Murray Stahl, holding a $38.8 million position; 1.6% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism include Paul Marshall and Ian Wace's Marshall Wace LLP, and Matthew Hulsizer's PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Icahn Capital LP allocated the biggest weight to Icahn Enterprises LP (NASDAQ:IEP), around 60.63% of its 13F portfolio. Horizon Asset Management is also relatively very bullish on the stock, dishing out 1.56 percent of its 13F equity portfolio to IEP.

As industrywide interest jumped, specific money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Icahn Enterprises LP (NASDAQ:IEP). Marshall Wace LLP had $3.1 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also made a $0.2 million investment in the stock during the quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Icahn Enterprises LP (NASDAQ:IEP) but similarly valued. These stocks are AngloGold Ashanti Limited (NYSE:AU), Shinhan Financial Group Co., Ltd. (NYSE:SHG), Lumen Technologies, Inc. (NYSE:LUMN), W.R. Berkley Corporation (NYSE:WRB), Gold Fields Limited (NYSE:GFI), Molina Healthcare, Inc. (NYSE:MOH), and Citizens Financial Group Inc (NYSE:CFG). This group of stocks' market valuations are similar to IEP's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AU,17,586074,1 SHG,4,18777,2 LUMN,31,762836,1 WRB,28,382157,1 GFI,15,508773,0 MOH,35,1418238,1 CFG,36,467127,-11 Average,23.7,591997,-0.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.7 hedge funds with bullish positions and the average amount invested in these stocks was $592 million. That figure was $10576 million in IEP's case. Citizens Financial Group Inc (NYSE:CFG) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Icahn Enterprises LP (NASDAQ:IEP) is even less popular than SHG. Our overall hedge fund sentiment score for IEP is 26. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards IEP. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th but managed to beat the market again by 16.1 percentage points. Unfortunately IEP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); IEP investors were disappointed as the stock returned 5.1% since the end of the third quarter (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.

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