Here's What Billionaire Value Hunter Carl Icahn Is Buying

Updated

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 Capital Management's stock portfolio totaled $9.8 billion in value as of March 31, 2012, with just 17 holdings. Its top three holdings, Icahn Enterprises L.P., Federal-Mogul, and Motorola Mobility, make up 65% of the overall portfolio's value.

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


There are no new holdings, but Icahn more than tripled his stake in CVR Energy (NYS: CVI) , a petroleum refiner and chemical company. Icahn has already accumulated a majority stake in CVR in this hostile takeover attempt and has said he plans to sell the company, though it's not yet clear whether he wants to break it up first. Through a tender offer to shareholders of $30 per share, he reportedly recently owned some 69% of the company's shares.

Icahn also boosted his holdings of online health information portal WebMDHealth (NAS: WBMD) , which is down 55% over the past year. Many are fleeing after poor earnings reports and the company taking itself off the block, but Icahn must see some value here. Investors were also less than thrilled when the company announced plans to spend big bucks buying back shares. This may indeed boost value for shareholders, but it does nothing for long-term growth.

Icahn shrunk his stake in Commercial Metals (NYS: CMC) , a Texas-based company that manufactures and recycles items made of steel and other metals. Among other things, it processes scrap metal into raw materials for other manufacturers. Icahn had aimed to buy the company, but changed his mind when there wasn't enough support from shareholders or other buyers.

Finally, Icahn unloaded two companies, selling out of El Paso (NYS: EP) and Motorola Solutions. El Paso is being bought by Kinder Morgan, while some of its properties are going to El Paso Pipeline Partners. El Paso's CEO, Douglas Foshee, has been criticized for trying to put management interests ahead of shareholders' in the deal-making process.

Another interesting detail is not in the filing. Some believe that with special permission from the SEC to not disclose this activity while it's ongoing, Icahn is building up a big position in troubled Chesapeake Energy (NYS: CHK) . The company has lost the confidence of many investors, with the often bizarre behavior of its CEO and board of directors, who don't seem to be putting shareholder interests first.

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. 13-F forms can be great places to find intriguing candidates for our portfolios.

If you'd like to invest in an energy company and you, too, have lost faith in Chesapeake, check out our special free report, "The Only Energy Stock You'll Ever Need."

At the time thisarticle was published Longtime Fool contributorSelena Maranjian, whom you canfollow on Twitter, holds no position in any company mentioned.Click hereto see her holdings and a short bio. The Motley Fool owns shares of Chesapeake Energy.Motley Fool newsletter serviceshave recommended buying shares of Chesapeake Energy and El Paso Pipeline Partners. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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