In this article we discuss the 10 best stocks to buy according to billionaire Carl Icahn. If you want to skip our detailed analysis of Icahn‘s history and hedge fund performance, go directly to the 5 Best Stocks to Buy According to Billionaire Carl Icahn.
Carl Icahn is a renowned figure in Wall Street who has been making an impact on corporate America for years. He started out in the 1980s and is now one of the wealthiest hedge fund managers with over $20 billion in managed securities. According to Forbes, Icahn’s net worth is over $15.1 billion as of 2021. The billionaire earned a reputation as a “corporate raider” due to his activism and aggressive investment initiatives that have often led to the corporate takeover of many companies.
Icahn builds stakes in companies with an intention of pushing their management to increase shareholder value and fix their problematic business practices. As a result, the companies in which Icahn piles into often feel the “Icahn lift” for their stock prices.
Some of the notable holdings of Carl Icahn’s hedge fund as of the first quarter of 2021 include Occidental Petroleum Corporation (NYSE: OXY), Newell Brands Inc (NASDAQ: NWL), Xerox Holdings Corporation (NYSE: XRX), Herc Holdings Inc. (NYSE: HRI) and FirstEnergy Corp. (NYSE: FE), among others.
Icahn has been a holding stakes in Herbalife Nutrition Ltd (NYSE: HLF) for years. However, in the first quarter, the billionaire cut his hold in the company by 61%. At the end of March 2021, Icahn’s fund reported owning a $355 million stake in the company.
Icahn is the founder and the controlling shareholder of Icahn Enterprises L.P. (NASDAQ: IEP) which is a New York-based conglomerate holding company. It is also Icahn’s primary investing vehicle which has investments in several industries such as energy, metals, real estate, automotive and home fashion. The company reported its first quarter of 2021 revenues of $3.4 billion and net income of $162 million or $0.65 per depositary unit compared to a revenue of $60 million in Q1 of 2020 and a net loss of $1.4 billion or $6.34 per depositary share. The adjusted EBITDA amounted to $435 million compared to $1.3 billion in the first quarter of 2020. However, the net asset value of Icahn Enterprises L.P. (NASDAQ: IEP) increased to $4.22 billion compared to $3.55 billion in fiscal year 2020. The company’s board of directors announced a quarterly dividend of $2.00 per depositary unit, payable on June 30, 2021.
Recently, the billionaire has pushed for changes at FirstEnergy Corp. (NYSE: FE) and Bausch Health Companies Inc. (NYSE: BHC) and has settled with both the companies to win board seats for his representatives. Icahn has also changed his negative opinion about the cryptocurrency industry as he hinted at a potential billion dollar investment in crypto in a recent interview with Bloomberg.
Icahn is an exception in an industry that is reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s now discuss our list of the 10 best stocks to buy according to billionaire Carl Icahn.
Best Stocks to Buy According to Billionaire Carl Icahn
10. Herc Holdings Inc. (NYSE: HRI)
Icahn’s Stake Value: $455,457,000
Percent of Carl Icahn’s 13F Portfolio: 1.9%
Number of Hedge Fund Holders: 17
Herc Holdings Inc. (NYSE: HRI) along with its subsidiaries is an equipment rental supplier that has operations in the United States and abroad. The company is involved in aerial, material handling, earthmoving, compaction, compressors, and lighting equipment. Herc Holdings Inc. (NYSE: HRI) reported Q1 results for fiscal year 2021 which showed a total revenue of $1.3 billion and an adjusted corporate EBITDA of $2 million. At the end of the quarter, the company had $1.1 billion in liquidity.
Herc Holdings Inc. (NYSE: HRI)’s quarterly earnings of $1.10 per share beat consensus estimates of $0.25 per share. There was an earnings surprise of 340% and over the past four quarters, Herc has surpassed consensus EPS estimates four times making it one of the 10 best stocks to buy now according to Carl Icahn.
9. Cloudera, Inc. (NYSE: CLDR)
Icahn’s Stake Value: $636,824,000
Percent of Carl Icahn’s 13F Portfolio: 2.67%
Number of Hedge Fund Holders: 30
Cloudera, Inc. (NYSE: CLDR) is a California-based cloud company that offers a suite of management and data analytics products in the US, Asia, and Europe. Investors are watching Cloudera, Inc. (NYSE: CLDR) closely after WSJ reported on May 31 that KKR and Clayton Dubilier & Rice are inching towards closing a deal to buy the company and take it private.
The company reported its fourth quarter revenue in 2020 to be $226.6 million which was a 7% increase year-over-year. Subscription revenue increased by 14% to $206.8 million while annualized recurring revenue increased by 10%.
Moreover, operating cash flow increased to $155.8 million compared to negative $36.8 million in fiscal year 2020. Cloudera, Inc. (NYSE: CLDR) is also collaborating with NVIDIA Corporation (NASDAQ: NVDA) to accelerate data analytics and AI in the cloud. With a strong quarter, Cloudera has a positive outlook for fiscal year 2022 with first quarter revenues estimated to be within $216-218 million and net income per share in the range of $0.07 to $0.09 per share.
Cloudera, Inc. (NYSE: CLDR) ranks 9th in the list of the 10 best stocks to buy according to billionaire Carl Icahn.
Like Occidental Petroleum Corporation (NYSE: OXY), Newell Brands Inc (NASDAQ: NWL), Xerox Holdings Corporation (NYSE: XRX), Herc Holdings Inc. (NYSE: HRI) and FirstEnergy Corp. (NYSE: FE), CLDR is one of the best stocks to buy according to billionaire Carl Icahn.
8. FirstEnergy Corp. (NYSE: FE)
Icahn’s Stake Value: $657,991,000
Percent of Carl Icahn’s 13F Portfolio: 2.75%
Number of Hedge Fund Holders: 51
FirstEnergy Corp. (NYSE: FE) is involved in the generation, transmission, and distribution of electricity in the US. Operating 24,035 circuit miles of transmission lines, the company has made a mark on the power industry in the country. FirstEnergy Corp. (NYSE: FE) reported Q1 earnings for 2021 of $335 million or $0.62 per share of common stock and a revenue of $2.7 billion while Q1 earnings for 2020 were $74 million or $0.14 per share of common stock and revenue totaled $2.7 billion.
For the next quarter, the company forecasts its GAAP earnings to lie in the range of $260 to $315 million or $0.48 to $0.58 per share. The stock ranks 8th in the list of best stocks to buy according to billionaire Carl Icahn.
7. Xerox Holdings Corporation (NYSE: XRX)
Icahn’s Stake Value: $698,229,000
Percent of Carl Icahn’s 13F Portfolio: 2.92%
Number of Hedge Fund Holders: 30
Another tech company on the list of best stocks to buy according to billionaire Carl Icahn is Xerox Holdings Corporation (NYSE: XRX) which is involved in the designing and selling of document management systems and solutions in the US, Canada, Europe, and other countries worldwide. The company announced a total revenue of $1.71 billion in Q1 of 2021 which is down 8.1% year-over-year. The GAAP earnings per share was $0.18 up by $0.21 year-over-year while the adjusted operating margin was up by 50 basis points to 5.2%.
Even though many offices remained closed, Xerox Holdings Corporation (NYSE: XRX) was able to grow their equipment sales and IT services revenue year-over-year indicating that the company is on track to achieve their targets for fiscal year 2021. The company has also acquired Groupe CT which is the leading independent document management provider in Canada. This will help Xerox to grow their presence in the small and midsize market in North America.
Xerox Holdings Corporation (NYSE: XRX) recently declared a quarterly dividend of $0.25 per share on the company’s common stock which is payable on 2nd August 2021. Additionally, a quarterly dividend of $20 per share was also declared on the outstanding holdings series A convertible perpetual preferred stock which is payable on 1st July 2021. Xerox Holdings Corporation (NYSE: XRX) has landed the number 7 spot in the 10 best stocks to buy according to Carl Icahn list.
Like Occidental Petroleum Corporation (NYSE: OXY), Newell Brands Inc (NASDAQ: NWL), Herc Holdings Inc. (NYSE: HRI) and FirstEnergy Corp. (NYSE: FE), XRX is one of the best stocks to buy according to billionaire Carl Icahn.
6. Navistar International Corporation (NYSE: NAV)
Icahn’s Stake Value: $736,620,000
Percent of Carl Icahn’s 13F Portfolio: 3.08%
Number of Hedge Fund Holders: 21
Navistar International Corporation (NYSE: NAV) is a provider of commercial trucks, diesel engines, school and commercial buses along with service parts. The company ranks number 6 in the 10 best stocks to buy according to billionaire Carl Icahn. Navistar International Corporation (NYSE: NAV) reported an adjusted net income of $5 million in Q1 of fiscal year 2021 compared to a loss of $33 million a year ago. Total revenues in the quarter amounted to $1.8 billion and the adjusted EBITDA rose to $116 million compared to $59 million year-over-year. At the end of the quarter, Navistar had $1.3 billion in cash and cash equivalents leaving it in a strong liquidity position for the rest of the year.
Navistar International Corporation (NYSE: NAV) also entered into a collaboration with General Motors Company (NYSE: GM) and OneH2 to bring a hydrogen truck ecosystem solution to the industry. It is also launching a new aftermarket product line called Diamond Advantage Diesel Parts. Overall, the company experienced higher-than-expected sales as its global operations led to outperformance.
Like Occidental Petroleum Corporation (NYSE: OXY), Newell Brands Inc (NASDAQ: NWL), Xerox Holdings Corporation (NYSE: XRX), Herc Holdings Inc. (NYSE: HRI) and FirstEnergy Corp. (NYSE: FE), NAV is one of the best stocks to buy according to billionaire Carl Icahn.
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Disclosure: None. 10 Best Stocks to Buy According to Billionaire Carl Icahn is originally published on Insider Monkey.
