Here's What Billionaire Value Hunter Carl Icahn Has Been Buying and Selling
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's company's reportable stock portfolio totaled $10.5 billion in value as of June 30, 2012. Its top three holdings, Icahn Enterprises LP, CVR Energy (NYS: CVI) , and Chesapeake Energy (NYS: CHK) , make up a big 63% of the overall portfolio's value.
So what does Icahn's latest quarterly 13F filing tell us? Here are a few interesting details:
A key new holding is Chesapeake Energy, long reviled for abysmal leadership and governance practices. Its stock is down some 34% over the past year, leading some to wonder whether it's now attractive. Plenty of negatives remain, though, such as massive debt, which the company aims to pay down by selling off billions of dollars' worth of assets.
Among holdings in which Icahn increased its stake were CVR Energy and Navistar (NYS: NAV) . Icahn bought into CVR Energy in an effort to make a hostile bid for the petroleum refiner and chemical company. He recently held about 80% of its shares and had announced plans to buy the rest, after CVR failed to find any alternate buyers. While some have thought that Icahn would sell the company, an August statement said, "Icahn Enterprises intends to focus on operating CVR's business for the benefit of its stockholders because it believes that continual shopping of CVR could be disruptive to its operations." Just yesterday, though, news broke that Icahn was withdrawing his bid for CVR, saying it "isn't feasible" because of conditions in the industry.
Navistar, a maker of trucks, buses, engines, and more for commercial and military markets, is down about 29% over the past year, with the company offering many excuses. Part of the blame lies with production and quality problems. The company is trying to boost business by expanding into emerging markets and emerging alternative energies, as well, via some strategic partnerships. Recently, the company announced plans to reduce its workforce, and some investors are taking a wait-and-see approach.
Meanwhile, Icahn continued reducing its 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. In its last quarter, the company posted an earnings-per-share increase of 13% on revenue down a smidge. It has been pressured by weak scrap metal markets and Europe's troubles, but points to a strong backlog of orders.
Finally, Icahn unloaded Motorola Mobility completely, as the company was bought for $12.4 billion by Google (NAS: GOOG) , which wanted Motorola's patents, among other things. The purchase included a 63% price premium, fetching Icahn a tidy profit before he sold. The deal will help Google expand into more hardware and device offerings. Some worry, though, that Google might lose its culture of innovation by relying too much on acquisitions. Icahn doesn't own shares of Google.
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. 13F forms can be great places to find intriguing candidates for our portfolios.
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The article Here's What Billionaire Value Hunter Carl Icahn Has Been Buying and Selling originally appeared on Fool.com.Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Google, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Google and Chesapeake Energy. Motley Fool newsletter services have recommended buying shares of Google. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.