Tracking Carl Icahn’s Portfolio – Q1 2022 Update (NASDAQ:IEP)

This article is part of a series that provides an ongoing analysis of the changes made to Carl Icahn’s 13F portfolio on a quarterly basis. It is based on Icahn’s regulatory 13F Form filed on 5/13/2022. Please visit our Tracking Carl Icahn’s Portfolio series to get an idea of his investment philosophy and our previous update for the fund’s moves during Q4 2021.

This quarter, Icahn’s 13F portfolio value decreased marginally from $22.29B to $21.87B. The number of holdings remained steady at 16. The portfolio is very concentrated with the largest five positions accounting for ~83% of the entire holdings: Icahn Enterprises, CVR Energy, Cheniere Energy, FirstEnergy, and Bausch Health.

Carl Icahn is best known for building sizable stakes in businesses and then pushing for changes to increase shareholder value. To learn more about his investing style and philosophy check out “King Icahn: The Biography of a Renegade Capitalist”.

Note 1: Regulatory filings from last week disclosed that they have discontinued their proxy contests at McDonald’s (MCD) and Kroger (KR).

Note 2: Icahn’s 13F filing is a consolidated report and so should not be viewed as a single portfolio. Specifically, Icahn Enterprises holds several of the businesses and the entities in turn hold Icahn Enterprises. For an idea on the business structure, check-out Icahn Enterprises Investor Presentation (Slide 5).

New Stakes:

International Flavors & Fragrances (IFF): IFF is a very small 0.39% of the portfolio stake established this quarter at prices between ~$116 and ~$150 and the stock currently trades at ~$125.

Stake Disposals:

Occidental Petroleum (OXY): OXY was a 5.85% of the portfolio stake established in Q2 2019 at ~$52 per share. Q3 2019 saw a ~23% selling at prices between $42 and $53 and that was followed with a ~15% reduction in Q1 2020 at prices between $37.25 and $44.50. The pattern reversed in Q2 2020: ~300% stake increase at an average cost of ~$14.60. There was a ~40% selling in Q2 2021 at prices between ~$23 and ~$33. The elimination this quarter was at prices between ~$31 and ~$61. The stock is now at $63.87. Their overall cost-basis is ~$22 per share.

Note: they still hold a 15M stake in the warrants with a strike price of $22 per share.

Stake Decreases:

Cheniere Energy (LNG): LNG is a large (top three) ~6% portfolio position. The bulk of it was purchased in Q3 2015 at prices between $47.50 and $70.50. Q4 2015 saw a ~15% increase at prices between $36 and $54. There was an about turn in Q2 2018: ~28% reduction at ~$65. Q4 2020 saw another ~20% selling at prices between ~$46 and ~$61. That was followed with a ~40% selling this quarter at prices between ~$103 and ~$149. The stock currently trades at ~$135.

Newell Brands (NWL): NWL is a 3.24% of the portfolio position established in Q1 2018 at a cost-basis of $27.40 per share. The stock is now at $19.14. Q2 2018 saw a ~10% stake increase at prices between $23 and $28 and that was followed with a ~15% increase next quarter at prices between $20.50 and $28. There was a ~25% reduction this quarter at $25.86 per share in a repurchase agreement with the company. Overall, their cost-basis is ~$25.60.

Note 1: They still have a ~8.2% stake in the business.

Note 2: In April 2019, rival activist Starboard Value came to an agreement with Carl Icahn whereby they now together control Newell’s board.

Delek US Holdings (DK): DK is a very small 0.13% of the portfolio position. It came about as partial consideration of the special dividend paid by CVR Energy (0.1048 shares of DK for each CVI and the rest in cash). The stock currently trades at $33.39. The position was sold down by ~80% this quarter. Part of it was through the sales of ~3.49M shares back to the issuer at $18.30 per share in a Stock Purchase and Cooperation Agreement with the company.

Stake Increases:

Occidental Petroleum wts: The 2.43% of the portfolio position was established in Q3 2020 when 19.3M warrants (strike 22, 8/3/2027 expiry) were purchased for ~$2.75 per warrant. The stake saw a ~20% selling in Q3 2021. There was a marginal increase this quarter. The warrants currently trade at $41.98.

Note: The large position in the common stock was sold during the quarter.

Kept Steady:

Icahn Enterprises (IEP): IEP position has seen consistent increases over the years. The 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, to ~158M shares in 2017, 175.4M in 2018, 197M in 2019, 222M shares in 2020, 257M shares in 2021, and 266M shares (~88% of business) as of Q1 2022. The stock currently trades at $51.27. IEP Book Value per share is ~$11.60 per share.

Note: The stake increase over the years is primarily due to them taking the dividend consideration in additional shares rather than cash.

CVR Energy Inc. (CVI): CVI is a top three 8.32% of the 13F portfolio position first purchased in Q4 2011. The bulk of the current position (71.2M shares: ~71% of the whole business) was purchased through a $30 per share tender offer in H1 2012. The stock currently trades at $41.45.

Note: Two MLPs were carved out since the 2012 tender: CVR Refining the refining portion and CVR Partners (UAN) the nitrogen fertilizer unit. CVR Energy had majority ownership stake in both. In August 2015, CVR Partners agreed to merge with Rentech Nitrogen. Q2 2018 saw a tender offer whereby new CVR Energy shares were exchanged for CVRR at a valuation of $24.26 per common unit (0.6335 shares of CVI for one CVRR). ~22M new shares were issued.

FirstEnergy Corp (FE): FE is a ~4% of the portfolio position purchased in Q1 2021 at prices between ~$29.50 and ~$35.60 and the stock currently trades at $40.60.

Bausch Health (BHC): The 3.63% of the portfolio BHC position was purchased in Q4 2020 at prices between ~$15.30 and ~$21 and increased by ~575% next quarter at prices between ~$21.25 and ~$34.40. The stock currently trades well below those ranges at $8.03.

Note: They own 34.7M shares (~10% of the business). Two Icahn nominees are on the board.

Herc Holdings (HRI): HRI is a ~3% of the portfolio position established in Q2 2016 as a result of the spinoff of Herc Holdings from Hertz Global Holdings. There was a ~4% stake increase in Q3 2017 at ~$38.50. The stock started trading at ~$33 and currently goes for ~$112. Last quarter saw a ~11% trimming at prices between ~$180 and ~$190.

Note: They have a ~13.5% ownership stake in the business.

Xerox Corporation (XRX): XRX is a ~3% of the portfolio position established in Q4 2015 at prices between $24 and $32. The four quarters through Q2 2021 had seen a roughly one-third stake increase. Their overall cost basis is ~$25 and they have a ~22% ownership stake in the business. The stock is now at $17.83.

Note 1: In December 2017, Icahn launched a proxy battle nominating four new board members in an effort to stop the Xerox-Fujifilm deal announced earlier. In May 2020, Xerox scrapped 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 that transaction closed in January 2017. That was followed with a 1:4 stock-split in June. The prices quoted above are adjusted for these two transactions.

Welbilt Inc. (WBT) previously Manitowoc Food Service: The small 1.21% of the portfolio WBT stake was established as a result of the spin-off from Manitowoc. The spin-off terms called for one share of WBT for each share of MTW held. Icahn held 10.58M shares of MTW for which he received the same number of WBT shares. Regular-way trading started in early March 2016 with WBT at $13.41. It currently trades at $23.68 compared to Icahn’s overall cost-basis of ~$13. There was a ~18% stake increase in Q1 2020.

Note: Icahn controls ~9.5% of the business.

Dana Inc. (DAN): The 1.15% DAN stake was established in Q4 2020 at prices between ~$13.25 and ~$20 and increased by ~200% next quarter at prices between ~$19 and ~$27. Q3 2021 also saw a ~20% stake increase at prices between $20.90 and $24.60. The stock currently trades at $16.44.

Note: Icahn controls ~10% of Dana Inc.

Southwest Gas Holdings (SWX): SWX is a ~1% of the portfolio position established over the two quarters through Q3 2021 at prices between ~$63 and ~$72. The stock currently trades at $91.89.

Note 1: Regulatory filings from earlier this month show them owning 5.09M shares (7.6% of the business). This is compared to ~2.9M shares in the 13F report. The increase was due to the acquisition of 2.19M shares from a tender offer at a price of $82.50 per share.

Note 2: The position was made public on October 4^th in a regulatory filing when they said they were opposed to Southwest’s acquisition of Questar Pipeline, Dominion Energy’s (D) transportation and storage business. A proxy contest and a $75 per share tender offer for all outstanding shares soon followed on October 14^th. A motion to block the Quester Pipeline deal was denied in December. Last Month, a settlement was reached whereby the CEO was replaced.

Conduent Inc. (CNDT): The small 0.90% portfolio stake came about as a result of Conduent’s spinoff from Xerox that closed in January 2017. Terms called for Xerox shareholders to receive Conduent shares in the ratio 1:5. Icahn owned 99M shares of Xerox for which he received 19.8M shares of Conduent. CNDT started trading at ~$15 and currently goes for $4.96. Q2 2019 saw a ~60% stake increase at around $9 per share. That was followed with a ~20% increase in Q4 2019 at ~$6.50 per share.

Note: Their ownership interest in Conduent is at ~18% of the business.

SandRidge Energy (SD): SD is a 0.35% of the portfolio activist stake established in Q4 2017 at prices between $16 and $21 and the stock is now at $26.87.

Note: Icahn has a ~13.5% ownership stake in the business. He lobbied the board and succeeded in ending the Bonanza Creek acquisition on December 28, 2017. In June 2018, Icahn gained control of Sandridge’s board by winning a proxy battle.

Note: Icahn also owns significant stakes in the following OTC stocks: ~36M shares (48.6% of 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 in Fannie/Freddie (OTCQB:FNMA) (OTCQB:FMCC). The Enzon position saw a substantial increase in Q4 2020 as they participated in a rights offering.

The spreadsheet below highlights changes to Icahn’s 13F stock holdings in Q1 2022:

Source: John Vincent. Data constructed from Carl Icahn’s 13F filings for Q4 2021 and Q1 2022.