Carl Icahn (Trades, Portfolio), manager of Icahn Capital Management, disclosed in a regulatory filing his top trades during the third quarter included new holdings of Twitter Inc. (TWTR, Financial) and Crown Holdings Inc. (CCK, Financial), boosts to his positions in Icahn Enterprises LP (IEP, Financial) and Southwest Gas Holdings (SWX, Financial) and a reduction to the Chenire Energy (LNG, Financial) investment.
The activist investor’s firm takes stakes in out of favor companies and pushes for management changes to unlock shareholder value. Icahn explains that consensus thinking is generally incorrect, and that the momentum can fall apart.
As of September, Icahn’s $21.23 billion 13F equity portfolio contains 17 stocks with a quarterly turnover ratio of 6%. The top four sectors in terms of weight are industrials, energy, utilities and technology, representing 69.49%, 14.75%, 5.48% and 2.71% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Icahn purchased 12,531,573 shares of Twitter (TWTR, Financial), giving the position 2.59% equity portfolio weight. Shares averaged $40.71 during the third quarter.
Twitter ceased trading on the New York Stock Exchange on Nov. 8. following Elon Musk taking the San Francisco-based social media company private following merger completion on Oct. 27. The company has a GF Score of 62 out of 100 based on a growth rank of 9 out of 10, a GF Value rank of 6 out of 10, a financial strength rank of 5 out of 10 and a profitability rank of 4 out of 10. Despite this, the company does not have enough data to compute a momentum rank and thus, the GF Score may give an incomplete picture of its potential.
Crown Holdings
The firm invested in 1.04 million shares of Crown Holdings (CCK, Financial), giving the position 0.40% equity portfolio weight. Shares averaged $93.24 during the third quarter.
GuruFocus’ GF Value Line labeled the Yardley, Pennsylvania-based packaging company a possible value trap due to its low price-to-GF Value ratio of 0.57 as of Monday and low financial strength rank of 4 out of 10.
Crown Holdings’ low financial strength rank is driven on several warning signs, which include a low Altman Z-score of 1.74, an interest coverage ratio that underperforms approximately 60% of global competitors and a debt-to-equity ratio that underperforms more than 96% of global consumer packaged goods companies.
Despite low financial strength, Crown Holdings has a GF Score of 81 out of 100, driven by a rank of 8 out of 10 for profitability and GF Value, a momentum rank of 7 out of 10 and a growth rank of 5 out of 10.
Icahn Enterprises
The firm added 10,902,568 shares of Icahn Enterprises (IEP, Financial), boosting the position by 3.93% and its equity portfolio by 2.55%.
The activist investor has served as board chairman of the Sunny Isles Beach, Florida-based business service company since 2007. Icahn Enterprises has a GF Score of 70 out of 100 based on a momentum rank of 9 out of 10, a GF Value rank of 6 out of 10, a growth rank of 2 out of 10 and a rank of 5 out of 10 for profitability and financial strength.
Southwest Gas Holdings
Icahn purchased 1,508,509 shares of Southwest Gas Holdings (SWX, Financial), boosting the position by 29.56% and its equity portfolio by 0.50%.
Shares of Southwest Gas averaged $81.11 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.81 as of Monday.
The Las Vegas-based utility company has a GF Score of 74 out of 100: Although the company has a GF Value rank of 9 out of 10 and a rank of 7 out of 10 for profitability and growth, Southwest Gas’ financial strength ranks just 3 out of 10 while the company’s momentum ranks just 2 out of 10.
Southwest Gas’ low financial strength rank is driven by several warning signs, which include a low Altman Z-score of 0.88, a low interest coverage ratio of 1.85 and a debt-to-equity ratio that underperforms more than 80% of global competitors.
Cheniere Energy
Icahn sold 3.5 million shares of Cheniere Energy (LNG, Financial), slicing 62.37% of the position and 2.23% of its equity portfolio.
Shares of Cheniere Energy averaged $151.67 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.79 as of Monday.
The Houston-based liquified natural gas exploration company has a GF Score of 73 out of 100 based on a GF Value rank of 9 out of 10, a growth rank of 8 out of 10, a profitability rank of 4 out of 10 and a rank of 3 out of 10 for momentum and financial strength.
