Neilson Barnard
This article is part of a series providing an ongoing analysis of changes to Carl Icahn’s 13F portfolio on a quarterly basis. It is based on Icahn’s regulatory 13F form filed on 02/14/2023. Please visit our series tracking Carl Icahn’s portfolio to get an idea of his and our investment philosophy previous update for the movements of the fund in the third quarter of 2022.
This quarter, the value of Icahn’s 13F portfolio increased ~3% from $21.23 billion to $21.75 billion. The number of participations fell from 17 to 16. The portfolio is very concentrated, with the top five holdings accounting for ~84% of total holdings: Icahn Enterprises, CVR Energy, FirstEnergy, Occidental Petroleum Warrants, and Xerox Corp.
Carl Icahn is best known for building sizable holdings in companies and then pushing for changes to increase shareholder value. To learn more about his investment style and philosophy check out”King Icahn: The Biography of a Renegade Capitalist“.
Note: Icahn’s 13F filing is a consolidated report and should not be viewed as a single portfolio. In particular, Icahn Enterprises owns several of the companies, and the companies in turn own Icahn Enterprises. See the Icahn Enterprises Investor Presentation (Slide 5) for an idea of the business structure.
Sale of shares:
Twitter Inc.: The major (top 5) Twitter position was built in the mid 1930’s. Trading made significant short-term gains as Elon Musk’s deal for Twitter closed at $54.20 per share last October.
Decreased Mission:
Cheniere Energy (LNG): LNG is now a small portfolio position at 0.69%. The majority of the original large interest was acquired in Q3 2015 at prices ranging from $47.50 to $70.50. Q4 2015 saw an increase of ~15% with prices between $36 and $54. There was a reversal in Q2 2018: ~28% discount at ~$65. In the fourth quarter of 2020, an additional ~20% was sold at prices between ~$46 and ~$61. This was followed by another ~94% reduction over the last four quarters at prices between ~$103 and ~$174. The stock is currently trading at ~$153. You realize long-term gains.
Herc Holdings (HRI): HRI accounts for 2.24% of the portfolio position, which was built in Q2 2016 as a result of Herc Holdings’ spin-off from Hertz Global Holdings. The stock started trading at ~$33 and is currently trading at ~$135. The last activities follow. Q4 2021 saw a cut of ~11% with prices between ~$180 and ~$190. This was followed by a ~7% cut in the lower 130s this quarter.
Note: Regulatory filings filed since the end of the quarter show they own 1.67M shares (~5.7% of the business) of Herc Holdings. This compares to 3.7M shares in the 13F report. The reduction came at prices ranging from $141 to $158 per share.
Stake Increases:
Icahn company (NASDAQ:IEP): The IEP position has steadily increased over the years. Position size increased from ~98M shares to ~102M shares in 2013, to ~109M shares in 2014, to ~117M shares in 2015, to ~130M shares in 2016 ~158M shares in 2017, 175.4M in 2018, 197M in 2019, 222M shares in 2020, 257M shares in 2021 and 3000M shares from EOY 2022. The stock is currently trading at ~$53. IEP book value per share is ~$12 per share.
Note: The increase in stake over the years is primarily due to them taking dividend consideration in additional shares rather than cash.
Occidental Petroleum (OXY) wt.: The ~3% of portfolio position was established in Q3 2020 when 19.3M warrants (Strike 22, 3/8/2027 expiration) were purchased at ~$2.75 per warrant. The stake was sold ~20% in Q3 2021. There have been minor increases over the last four quarters. The warrants are currently trading at $39.21.
Note: You had a large position in OXY common stock, but it was sold in Q1 2022.
Crown Holdings (CCK): CCK accounts for 0.39% of the portfolio stake, which started last quarter at prices ranging from ~$80 to ~$102 and the stock is currently trading at $84.17. There was a slight increase this quarter.
Note 1: Regulatory filings show that they beneficially own 10.2 million shares (8.5% of the business). This includes futures contracts at a total price of $75 per share. Total spend was ~$687 million.
Note 2: An agreement was reached in January to appoint and nominate the director for the Company’s 2023 election.
Kept steady:
CVR Energy, Inc. (CVI): CVI is in the top 3 of the 13F portfolio position, first acquired in Q4 2011, at ~10%. The majority of the current position (71.2M shares: ~71% of the entire company) was acquired in the first half of 2012 via a takeover bid of $30 per share. The stock is currently trading at $31.13.
Note: Since the 2012 tender, two MLPs have been spun off: CVR Refining for the refining portion and CVR Partners (UAN) for the nitrogen fertilizer unit. CVR Energy held a majority stake in both. In August 2015, CVR Partners agreed to a merger with Rentech Nitrogen. In the second quarter of 2018, there was a tender offer in which new shares of CVR Energy were exchanged for CVRR at a value of $24.26 per common unit (0.6335 shares of CVI for one CVRR). ~22 million new shares were issued.
First Energy Corp. (FE): FE accounts for 3.66% of the portfolio position bought in Q1 2021 at prices between ~$29.50 and ~$35.60 and the stock is currently trading at $39.15.
Xerox Holdings Corporation (XRX): XRX is a 2.30% of portfolio position established in Q4 2015 at prices between $24 and $32. In the four quarters to the second quarter of 2021, the share had increased by about a third. Their total cost basis is ~$25 and they have an ownership interest of ~22% in the company. The stock is now at $16.10. Q2 2022 saw a slight increase of ~7%.
Note 1: In December 2017, Icahn launched a proxy fight nominating four new board members to stop the previously announced deal between Xerox and Fujifilm. In May 2020, Xerox terminated the deal with Fujifilm in a settlement with Icahn and Darwin Deason (another activist alongside Icahn).
Note 2: Icahn’s activism earned him three board seats in 2016. Xerox spun off Conduent and this transaction closed in January 2017. This was followed by a 1:4 stock split in June. The above prices are adjusted for these two transactions.
Newell Brands (NWL): NWL accounts for ~2% of the portfolio position established in Q1 2018 at a cost basis of $27.40 per share. The stock is now at ~$13. In the second quarter of 2018, the share increased by about 10% at prices between $23 and $28, followed by an increase of about 15% in the next quarter at prices between $20.50 and $28. In Q1 2022 there was a ~25% reduction to $25.86 per share in a repurchase agreement with the company.
Note 1: They still own ~8.2% of the company.
Note 2: In April 2019, rival activist Starboard Value reached an agreement with Carl Icahn that they now jointly control Newell’s board of directors.
Southwest Gas Holdings (SWX): The SWX accounts for 1.88% of the portfolio position built over the two quarters to the third quarter of 2021 at prices between ~$63 and ~$72. Last quarter saw a ~75% increase in stake through a takeover bid at $82.50 per share. This was followed by another roughly 30% surge this quarter at prices ranging from about $70 to about $88. The stock is currently trading at $59.64.
Note 1: You own ~9.8% of the company.
Note 2: The position was released in a regulatory filing last October when they said they opposed Southwest’s acquisition of Questar Pipeline, the transmission and storage business of Dominion Energy (D). A proxy contest and a $75 per share tender offer for all outstanding shares soon followed. A motion to block the Quester pipeline deal, but a deal was later reached replacing the CEO.
Bausch Health (BHC): The ~1% of BHC’s portfolio position was bought at prices between ~$15.30 and ~$21 in the fourth quarter of 2020 and increased by ~575% at prices between ~$21.25 and ~$34.40 in the next quarter. The stock is currently trading well below these ranges at $8.32.
Note: You own 34.7 million shares (~10% of the business). Two Icahn nominees serve on the board.
Dana Inc (DAN): The ~1% stake in DAN was established in the fourth quarter of 2020 at prices between ~$13.25 and ~$20 and increased by ~200% in the next quarter at prices between ~$19 and ~$27. In the third quarter of 2021, the share increased by ~20% with prices between $20.90 and $24.60. The stock is currently trading at $15.11.
Note: Icahn controls ~10% of Dana Inc.
Conduent Inc. (CNDT): The small portfolio holding of 0.71% came about as a result of Conduent’s spin-off from Xerox, which closed in January 2017. The terms provided that Xerox shareholders would receive Conduent shares at a ratio of 1:5. Icahn owned 99 million shares of Xerox, for which he received 19.8 million shares of Conduent. CNDT started trading at ~$15 and is currently priced at $3.63. During the second quarter of 2019, the stake rose about 60% to about $9 per share. This was followed by a ~20% increase in Q4 2019 at ~$6.50 per share.
Note: Your ownership interest in Conduent is ~18% of the deal.
Sandridge Energy (SD): SD is a 0.38% stake in Portfolio Activist, which started in Q4 2017 at prices between $16 and $21, and the stock is now at $14.30.
Note: Icahn has a ~13.5% interest in the company. He championed the board and was able to complete the Bonanza Creek acquisition on December 28, 2017. In June 2018, Icahn gained control of Sandridge’s board of directors by winning a proxy fight.
International Flavors & Fragrances (IFF): IFF accounts for a very small 0.31% of the portfolio stake established in Q1 2022 at prices between ~$116 and ~$150 and the stock is currently trading at ~$86.
Bausch + Lomb Corp. (BLCO): BLCO is a Bausch Health spinoff that was trading at ~$18 per share as of May last year. The stock is currently trading at $16.23. Last June, two nominees from Icahn joined the board.
Note: Icahn also owns significant interests in the following OTC stocks: ~36 million shares (48.6% of the business) of Enzon Pharmaceuticals (OTC:ENZN) at a cost basis of ~$2.70 and ~89% of Viskase Companies ( OTCPK:VKSC ). He is also known to have a position at Fannie/Freddie (OTCQB:FNMA) (OTCQB:FMCC). Enzon’s position saw a significant increase in the fourth quarter of 2020 as they participated in a rights offering.
The table below shows the changes in Icahns 13F stock holdings during Q4 2022:
Carl Icahn’s Q4 2022 13F Report – Q/Q Comparison (John Vincent (author))
Editor’s note: This article covers one or more securities that are not traded on a major US exchange. Please be aware of the risks associated with these stocks.
