Carl Icahn is a legend in the investing world . The man even helped inspire a movie character — Gordon Gekko from the 1987 film Wall Street . However, few everyday investors know much about Icahn’s investments, how his “corporate raider” and activist investor strategy works, and what has helped make him a billionaire. Source: Getty images Investors can get access to Carl Icahn’s strategy via an investment in Icahn Enterprises LP ( NASDAQ:IEP ). But let’s discuss Icahn’s investment approach and some of his past and present stock holdings, as well as where he doesn’t invest money. Carl Icahn’s investment strategy
Like fellow billionaire investor Warren Buffett , Icahn subscribes to a value investing strategy . Generally, Icahn is interested in investing in stocks that don’t fully reflect the businesses’ full potential. Icahn has said he buys into a company when “no one wants it.”
Notably, this strategy requires an investor to view buying a stock as an investment in a business . So before purchasing a stock, a subscriber to Icahn’s strategy should be familiar with how the business operates. While the market and analysts are focused on quarterly and annual earnings and stock price projections, Icahn is interested in uncovering parts of a business that many often miss. This is a type of contrarian investing philosophy .
There is a notable difference between Icahn and Buffett, though. Although both are value investors at heart, Buffett tends to buy with the intention of holding a stock indefinitely. By contrast, Icahn is willing to sell his stocks to lock in profits once the market figures out a company’s true value. Of course, Icahn does have long-term holdings. But his strategy is less about building a diversified portfolio of stocks and more about making shorter-term bets on stocks that might be due for a quick increase in value.
Perhaps his biggest claim to fame was his takeover of Trans World Airlines, better known as TWA, in the 1980s. The airline company had been struggling, and Icahn swooped in and took a controlling interest. By 1988, Icahn had worked out a deal to take TWA private and then began selling off its most valuable routes to other airlines. By 1992, TWA filed for bankruptcy, emerging in 1993 saddled with debt — and with Icahn among the biggest holders of the debt.
In lieu of debt repayment, Icahn worked out a deal where he could buy tickets from TWA at heavily discounted prices. He subsequently resold the tickets on the internet via a site he founded, LowestFare.com, now part of Booking Holdings ( NASDAQ:BKNG ). The remainder of TWA was eventually acquired by American Airlines ( NASDAQ:AAL ) in 2001.
More recently, Icahn acquired a sizable stake in Twitter ( NYSE:TWTR ) after Tesla ( NASDAQ:TSLA ) CEO Elon Musk attempted to back out of his acquisition offer. The dispute between Musk and Twitter cratered Twitter’s stock. Icahn reportedly made the purchase betting that Musk would ultimately agree to go through with the purchase rather than drag things out in a court case that he’d have a high probability of losing. Carl Icahn’s best investments
Investors can get access to most of Carl Icahn’s stock holdings via an investment in Icahn Enterprises LP, a company structured as a limited partnership with units that trade on the Nasdaq . Icahn is the majority shareholder of Icahn Enterprises LP, controlling some 86% of the units. Here are the other top stocks Icahn owns: Data source: Icahn Enterprises SEC filings and YCharts. Market caps as of Oct. 7, 2022. Company Market Capitalization Description CVR Energy ( NYSE:CVI ) $3.4 billion A petroleum refiner and nitrogen fertilizer manufacturer. Cheniere Energy ( NYSE:LNG ) $43 billion A leader in liquified natural gas. FirstEnergy ( NYSE:FE ) $21 billion A large electric utility in the U.S. with operations in the Northeast and mid-Atlantic. Newell Brands ( NYSE:NWL ) $5.9 billion A consumer products holding company with a variety of household basics brands. Xerox Holdings ( NASDAQ:XRX ) $2.3 billion An often-forgotten former leader in photocopying and digital document products. 1. CVR Energy
CVR Energy, a petroleum fuels refining company, is the top holding in Icahn Enterprises LP by market value. Through its holding in CVR Partners LP ( NYSE:UAN ), the company is also involved in the manufacturing of nitrogen fertilizers used in agriculture .
CVR is not a growth company, but it is profitable and returns its profits to shareholders (primarily Icahn) via a dividend . Icahn acquired a majority stake in […]
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