Billionaire Activist Investor Carl Icahn’s Top Small-Cap Picks For Q4

#3 Chesapeake Energy Corporation (NYSE:CHK)

 – Shares Owned by Icahn Capital LP (as of September 30): 73.05 Million

 – Value of Holding (as of September 30): $535.45 Million

Though most oil and gas companies have slumped heavily this year due to the fall in crude oil and natural gas prices, not many stocks can compare to the almost 80% fall Chesapeake Energy Corporation (NYSE:CHK)’s shares have registered year-to-date. Icahn Capital LP held on to its conviction in the stock by not selling any shares during the third quarter, but with no solution in sight for the debt woes of Chesapeake Energy Corporation (NYSE:CHK) the fund would be finding it very difficult to do so now. Recently, Chesapeake Energy Corporation revealed that it has hired restructuring advisor Evercore Partners to help it with the $11.8 billion debt the company has on its balance sheet. On December 23, analysts at SunTrust reiterated their ‘Buy’ rating on the stock, but lowered their price target on it to $7 from $10. Robert Pitts‘ Steadfast Capital Management initiated a stake in Chesapeake Energy Corporation during the third quarter by acquiring 9.23 million shares of the company.

#2 Federal-Mogul Holdings Corp (NASDAQ:FDML)

 – Shares Owned by Icahn Capital LP (as of September 30): 138.59 Million

 – Value of Holding (as of September 30): $946.57 Million

Moving on, Federal-Mogul Holdings Corp (NASDAQ:FDML) is another stock that has lost more than half of its market capitalization this year (down 55.6%). Amid a 40% drop in its stock during third quarter, Icahn Capital LP didn’t make any changes to its stake in the company. On October 28 Federal-Mogul Holdings Corp (NASDAQ:FDML) reported its third quarter earnings declaring EPS of $0.17 on revenue of $1.82 billion. Analysts had expected the company to report EPS of $0.22 on revenue of $2.02 billion. Following the earnings release, on October 29, analysts at FBR & Co. reiterated their ‘Market Perform’ rating on the stock, but lowered their price target to $9 from $14. Peter Rathjens, Bruce Clarke and John Campbell‘s Arrowstreet Capital almost doubled its stake in Federal-Mogul Holdings Corp to 259,500 shares during the third quarter.

#1 CVR Energy, Inc. (NYSE:CVI)

 – Shares Owned by Icahn Capital LP (as of September 30): 71.2 Million

 – Value of Holding (as of September 30): $3 Billion

Finally, even though CVR Energy, Inc. (NYSE:CVI) is the only stock among the top five in which Icahn Capital LP reduced its stake (by 6 million shares) it still remained the fund’s top small-cap pick at the end of September. Interestingly, it is also the only company on this list that is trading in the green for the year (up by 4.65%). The company currently pays a quarterly dividend of $0.50, which even translates into an attractive annual dividend yield of almost 5%. The company is scheduled to report its fourth quarter earnings in mid-February and analysts expect it to report a per share loss of $0.10 on revenue of $886.49 million. Joel Greenblatt’s Gotham Asset Management reduced its stake in CVR Energy, Inc. (NYSE:CVI) by 23% to 162,704 shares during the third quarter.

Disclosure: None