Carl Icahn, the billionaire founder of Sunny Isles Beach, Florida-based Icahn Enterprises LP (ticker: IEP), is raising some eyebrows with his portfolio’s 13F filing on Aug. 14, which covers the quarter ended June 30. That’s no surprise, considering Icahn’s tendency to go against the grain. Long considered one of Wall Street’s most aggressive activist investors, Icahn and his team made new buys and sells in the second quarter and continued to add to the benchmark position that bears Icahn’s name.
Speaking of that eponymous position, it’s taken a lashing by regulators lately. Icahn and Icahn Enterprises, still the largest position in his 13F portfolio by far as of the latest filing, faced charges from the Securities and Exchange Commission that they failed to disclose up to $5 billion in margin loans backed by the IEP stake. The SEC announced Aug. 19 that without admitting to wrongdoing, Icahn and IEP agreed to pay a total of $2 million in fines to settle the allegations.
Just when IEP shares appeared to stabilize from that announcement, the stock took another hit Aug. 26 after the company said in a regulatory filing that it plans to sell up to $400 million of its depositary units in an “at the market” offering to raise funds for acquisitions and company purposes. At press time, the share price was hovering at a loss of more than 12% for the day, headed for a 20-year low.
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With that shakiness in mind, here’s a look at Icahn’s second-quarter moves showing he remained focused on bucking trends and taking his $10.8 billion portfolio to places others may fear to tread. Still, you may want to take a wait-and-see attitude toward emulating Icahn’s stock picks, given that IEP and some of the others have been struggling lately:
Icahn Portfolio Updates in Q2
— Icahn bought 2.4 million shares of Caesars Entertainment Inc. (CZR) in the second quarter, representing 0.9% of the portfolio with a market value of about $97 million.
— The Icahn team also purchased 2.6 million shares of Centuri Holdings Inc. (CTRI), composing 0.5% of the portfolio with a market value of $50.5 million.
— Icahn’s team sold all of its holdings in Occidental Petroleum Corp. warrants (OXY.WS), formerly 6% of the portfolio.
— Icahn also sold off his total Conduent Inc. (CNDT) position. The portfolio formerly held 38.2 million shares of CNDT, or 1.1% of its holdings.
For the most part, Icahn made no changes to his top seven holdings in the second quarter, with one notable exception. Here are the top stocks to keep an eye on to gauge what the billionaire prioritized in Q2 2024:
| Icahn stock | Portfolio weight | Market value |
| Icahn Enterprises LP (IEP) | 61.8% | $6.7 billion |
| CVR Energy Inc. (CVI) | 16.5% | $1.8 billion |
| Southwest Gas Holdings Inc. (SWX) | 7.2% | $775.8 million |
| International Flavors and Fragrances Inc. (IFF) | 3.3% | $357.0 million |
| CVR Partners LP (UAN) | 2.7% | $294.5 million |
| Bausch Health Cos. Inc. (BHC) | 2.2% | $242.0 million |
| Dana Inc. (DAN) | 1.6% | $173.2 million |
Icahn Enterprises LP (IEP)
Percentage of portfolio: 61.8%
Icahn’s portfolio holds only 14 stocks and is concentrated heavily in a single asset: his own Icahn Enterprises.
IEP still attracts due to its sky-high 25.2% forward dividend payout, but the company saw second-quarter losses stack up. In that period, Icahn Enterprises posted losses of $331 million, or about 72 cents per share, compared to a $269 million loss during the same time period in 2023. Revenues are down to $2.4 billion from $2.7 billion.
That didn’t stop Icahn from adding 10.5% to its IEP position in Q2, bringing the total percentage committed to its chief asset to 61.8%, valued at $6.7 billion as of market close Aug. 23. However, that number is sure to change after its double-digit drop on Aug. 26.
Icahn Enterprises operates in eight diverse industries but is most highly concentrated in the automotive, energy and real estate sectors. IEP also either owns outright or has taken big positions in a diverse array of companies. With his hands firmly on the steering wheel, the activist investor has significant influence over the companies within the Icahn portfolio. That alone makes him one of the most powerful investors on Wall Street.
CVR Energy Inc. (CVI)
Percentage of portfolio: 16.5%
The Icahn team saw its position in CVR Energy slide from 20% of the portfolio in the first quarter to 16.5% in Q2 2024, bringing the market value of shares down to $1.8 billion. CVI shares have lost about 17% in the past three months.
On the upside, the Sugar Land, Texas-based petroleum financing company is back on track after its massive Wynnewood, Oklahoma, refinery has recovered from an April fire that halted operations. The fire led to a staggering drop in petroleum net income from $194 million in the second quarter of 2023 to $18 million in Q2 2024.
While the company’s Q2 earnings cleared expectations, some analysts are souring on the stock. Both Scotiabank and JPMorgan analysts have underweighted the stock, with target prices in the range of $24 to $26. CVI shares closed at $24.81 per share on Aug. 23.
But CVI still offers a robust dividend yield of 8.1%, a trait Icahn favors in a core holding.
Southwest Gas Holdings Inc. (SWX)
Percentage of portfolio: 7.2%
Southwest Gas is another energy mainstay in the Icahn portfolio; he has held the stock since the third quarter of 2021.
The stock is trading up 13% in 2024, although SWX has lost some luster in the past 90 days, with the stock falling by about 6% in that timeframe. A decent 3.5% dividend yield augments that share decline.
The Las Vegas-based natural gas operator missed its Q2 earnings estimates, with net income down from $27.6 million to $18.3 million year over year. Revenues were up slightly, and the company still holds a healthy cash reserve of $600 million, signaling strength in a sketchy energy economy. Despite all the sector and market chaos, Southwest Gas has been relatively stable.
The company specializes in natural gas operations and utility infrastructure services. There’s an element of reliability with Southwest Gas, as it’s historically been a favored provider of gas to homes and businesses since 1931, which gives SWX a robust long-term growth profile that appeals to investors.
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International Flavors and Fragrances Inc. (IFF)
Percentage of Portfolio: 3.3%
Like CVR and Southwest Gas, the Icahn team made no trades in its International Flavors position in the second quarter. Icahn still holds about 3.8 million shares of the New York-based flavors and fragrances company.
That strategy differed from Q1, in which IFF was a major “buy” in the first quarter for the Icahn portfolio, adding 3.1 million shares that represented a massive 481.8% uptick in share ownership from 2023 to 2024. The stock is trading around $100 per share as of Aug. 23, with shares up 24% on a year-to-date basis. Analysts remain high on the stock, with JPMorgan’s Jeffrey Zekauskas maintaining a “buy” on the stock with a $102 price target and Stifel upgrading to “buy” and setting a $115 price target. Both analysts cited solid volume growth and stronger profitability for IFF through 2025.
CVR Partners LP (UAN)
Percentage of portfolio: 2.7%
Icahn still owns 3.9 million shares of CVR Partners, but their market value was $294.5 million as of June 30, a slight decline from $305 million in the first quarter of 2024. UAN shares have fallen 14% in the past three months, though they’ve managed an 8% overall gain so far in 2024. The company also pays a healthy 10% dividend yield.
The Sugar Land, Texas, holding company operates in the renewable fuels and nitrogen fertilizer sector, with its primary products including ammonia and urea ammonium nitrate fertilizers. CVR serves industrial and agricultural customers in the U.S. South and Midwest.
CVR Partners is only 17 years old, but it is making steady gains in its sector, producing 221,000 tons of ammonia and 337,000 tons of urea-atomium nitrate (UAN), which generally matches production levels of a year ago. The problem is that product prices are in decline largely due to low demand. UAN prices have fallen 15% while ammonia prices have slid even further, falling 26% from Q2 2023.
CVR Partners will need to bide its time until its mainstay product pricing picture brightens. An experienced owner of UAN shares (he bought big in 2012), Icahn will likely ride this dip out.
Bausch Health Cos. Inc. (BHC)
Percentage of portfolio: 2.2%
Bausch Health’s portion of the Icahn portfolio has fallen from 3.1% in Q1 to 2.2% in Q2, primarily due to BHC’s continued share slide, as the stock is down 7.7% in the past three months. The stock price was $5.87 per share at the Aug. 23 market close, putting BHC in cheap-stock territory.
With the stock down nearly 30% for the year, Icahn’s patience could be wearing thin. Like the billionaire, the Canada-based drug manufacturer has suffered from some bad press lately, with rumors that the company was going bankrupt.
Analysts aren’t giving up on the stock, with TD Cowen’s Michael Nedelcovych sticking to his “hold” call with an optimistic price target of $12 per share. Nedelcovych cites Bausch’s recent revenue outperformance.
BHC’s quarterly earnings surprise of 10% on Aug. 1 was also no accident, as the company has been consistently beating estimates for consecutive quarters now.
Dana Inc. (DAN)
Percentage of portfolio: 1.6%
This Maumee, Ohio-based technology transport company is rising in the Icahn portfolio, now comprising 1.6% of assets.
Why Dana? That’s a good question. The company offers shareholders a 3.6% dividend yield, but its share price is down about 24% year to date.
Yet there could be a significant upside for DAN, and Icahn no doubt sees that potential.
Its earnings-per-share prospects are enticing, with estimated EPS growth of 36.2% for 2025 and a forward sales growth rate around 7%. The company has worked its way into the “sweet spot” of the electric vehicle parts market, claiming drive-unit partnerships with Ferrari NV (RACE) and a battery-cooling system deal for Ford Motor Co.’s (F) popular F-150 Lightning pickup truck.
Barclays’ Dan Levy is on board, recently calling for a $16 target price on DAN shares, mostly due to potentially higher future earnings growth. The stock closed at $11.10 on Aug. 23.
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7 Carl Icahn Stocks to Watch originally appeared on usnews.com
Update 08/26/24: This story was previously published at an earlier date and has been updated with new information.
