Carl Icahn has long been a favorite of investors to follow. He has many unique insights and is a deep value player – or rather, deep vulture player.
He added 6 million shares to his position in CVR Energy (NYSE: CVI), bringing his total to 77 million shares, or almost 90% of the company. Obviously, this is a takeover that has been unfolding since 2012.
The company operates as a petroleum refiner and nitrogen fertilizer manufacturer. The latter business is what’s been hot in the markets for a while. The company is a solid cash flow generator and may be undervalued.
He added 445,000 shares to the 45 million he already owned of eBay, Inc. (NASDAQ: EBAY), which is about 4% of the company. The move into the company was to push for a spinoff of PayPal, which was successful.
He adds to his position because he’ll get shares of PayPal when it spins off. I would buy PayPal on the spinoff, but that leaves a debt-heavy eBay with an antiquated online marketplace business.
There’s no surprise behind the addition of 13 million shares of Hertz Global Holdings (NYSE: HTZ) to his 39 million share war chest, bringing the total to 52 million, or 12% of the company. Hertz owns its flagship name, which has evolved into a super-premium business care rental brand, along with Dollar and Thrifty.
Nevertheless, it is an operational disaster in a business that should be making tons of money. Icahn wants to shake things up. I think this might be a speculative buy.
Icahn added to his position in Navistar International Corporation (NYSE: NAV). He now owns 20% of this company which manufactures Class 4 through 8 trucks, as well as diesel engines from 50 to 550 horsepower.
Navistar also has a high-margin lease financing business. Icahn has had this position since 2012, demanding board seats for a long list of operational failures. The company loses hundreds of millions of dollars every year and has been cash flow negative as well.
Icahn also started a 5 million share position (3.5%) in The Manitowoc Company (MYSE: MTW), best known for its construction cranes of all shapes and sizes, as well as foodservice equipment. He seeks a breakup of the company, which purchased the foodservice business 7 years ago. Neither business is booming right now. I think investors should be cautious about this play.
Of course, investors who love Icahn can buy directly into his own holding company, Icahn Enterprises, LP (NYSE: IEP), and enjoy the fruits of his labor and board fights dollar for dollar.
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