A Look at Billionaire Carl Icahn’s Top Holdings and Most Important Moves in Q3

Carl Icahn is one of the best activist investors, who over the years has managed to successfully increase the shareholder value of many companies. This is one of the reasons why Icahn’s moves are highly scrutinized. With the latest round of 13F filings completed, Icahn revealed his long positions as of the end of September and a couple of his moves made during the third quarter have caught our attention. Let’s take a closer look at Icahn’s equity portfolio and discuss some of his holdings.

Why are we interested in the picks of an investor like Icahn? Over the years, Icahn has managed to generate strong returns for his investors. As an activist, Icahn doesn’t simply invest in companies that have growth potential, but in companies that can generate catalysts that maximize value not just for him, but for other shareholders as well. That’s why following Icahn’s (and other activists’) targets is an almost certain way to beat the market. Another good approach is to invest in stocks that smart money is collectively bullish on. For example, the 15 most popular small-cap stocks among over 700 investors that we track at Insider Monkey have produced gains of 102% since August 2012, outperforming the S&P 500 ETF (SPY) by some 53 percentage points (see more details here).

Icahn’s top three holdings remained unchanged during the third quarter, including Icahn Enterprises LP (NASDAQ:IEP), Apple Inc. (NASDAQ:AAPL), and CVR Energy, Inc. (NYSE:CVI). Icahn Enterprises’ stock slid by over 21% in the third quarter and is down by 23% year-to-date as the holding company’s exposure to oil & gas companies is putting a lot of pressure on it amid the current environment. However, in the third quarter, Icahn Capital took the opportunity to acquire another 2.26 million shares, raising its stake to 114.55 million shares worth $7.68 billion, which gives it ownership of around 88% of Icahn Enterprises LP (NASDAQ:IEP)’s outstanding stock. Icahn Enterprises LP (NASDAQ:IEP) also pays a decent dividend of $1.50, which gives its stock a yield of 8.44%.

In Apple Inc. (NASDAQ:AAPL), Icahn left his position unchanged at 52.76 million shares valued at $5.82 billion. Icahn has been a long-term investor of the tech giant, often saying that Apple is the greatest company on the market, since it is consistently developing and is focused on returning capital to shareholders, taking advantage of its huge cash position. Apple’s stock has inched up by around 4% since the beginning of the year, amid the economic turmoil in China, which represents one of Apple Inc. (NASDAQ:AAPL)’s key markets and concerns over Apple’s dependency on a single product. However, so far, Apple has managed to consistently beat the estimates each quarter and, despite the fact that it has the largest capitalization on the market, it is still trading at just around 11 times forward earnings. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital is another investor betting big on Apple Inc. (NASDAQ:AAPL), holding 13.83 million shares as of September 30.

On the following page, we are going to take a look at some of Icahn’s new positions, such as PayPal Holdings Inc (NASDAQ:PYPL) and American International Group Inc (NYSE:AIG) and will review some of the most significant moves made by the investor in the third quarter.

The third quarter was marked by a number of IPOs, among which was PayPal Holdings Inc (NASDAQ:PYPL), which was was spun-off from eBay Inc (NASDAQ:EBAY). Icahn played a major role in the spin-off, having pushed for the transaction for months. In its latest 13F, Icahn revealed a $1.44 billion stake in PayPal Holdings Inc (NASDAQ:PYPL), which contains 46.27 million shares. We shall also remind you that before the spin-off, Icahn issued a letter in which he stated that PayPal should consolidate its position by acquiring or merging with another payment company. What’s also interesting to point out is that as the spin-off was completed, Icahn ditched his stake in eBay Inc (NASDAQ:EBAY), unloading 46.27 million shares of the company. Another investor that also chose to swap eBay for PayPal is David E. Shaw’s D. E. Shaw, which disclosed holding 12 million shares of PayPal Holdings Inc (NASDAQ:PYPL). At the same time, the fund cut 70% of its stake in eBay Inc (NASDAQ:EBAY), remaining with 1.95 million shares as of the end of the third quarter.

In the liquified natural gas company Cheniere Energy, Inc. (NYSEMKT:LNG), Icahn boosted his position by 27.47 million shares, holding 28.55 million shares worth $1.38 billion. As he acquired more shares, Icahn went activist on the company and obtained two seats on  its board. Seth Klarman’s Baupost Group is also bullish on Cheniere Energy, Inc. (NYSEMKT:LNG), adding 7.30 million shares to his portfolio during the third quarter, reporting ownership of 22.67 million shares in its latest 13F filing.

Freeport-McMoRan Inc (NYSE:FCX) and American International Group Inc (NYSE:AIG) represent two other new picks added to Icahn’s equity portfolio in the third quarter. The activist obtained two seats on Freeport-McMoRan Inc (NYSE:FCX)’s board a couple of months ago, as it acquired an 8.7% stake containing 100.0 million shares that were valued at $969.0 million at the end of September. Rob Citrone’s Discovery Capital Management followed Icahn, reporting a new stake of 17.11 million shares of Freeport-McMoRan Inc (NYSE:FCX) in its latest 13F filing.

In American International Group Inc (NYSE:AIG), Icahn reported a stake of 1.36 million shares worth $77.35 million. At the end of October, Icahn went activist on American International Group Inc (NYSE:AIG), urging the company to separate its life and mortgage units. Some analysts and other shareholders expressed their support for an AIG split, among them John Paulson of Paulson & Co, who said that a split of the company could send the stock above the $100 mark. Paulson owns 14.60 million shares of American International Group Inc (NYSE:AIG) as of the end of September.

Disclosure: None