In this piece, we will take a look at billionaire Carl Icahn’s top 10 stocks.
One would expect legendary investor Carl Icahn to go slow and cherish his extraordinary and successful career on Wall Street. However, that is not the case as he continues to push to shake up corporate America in pursuit of shareholder value.
At 88 years old, Icahn remains one of the most feared and revered hedge fund managers because he can move the markets as he wishes. While he is often compared to legendary investor Warren Buffett, Icahn deploys a far more aggressive investment strategy beyond value investing.
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The founder of Icahn Enterprises has built a reputation as a “corporate raider” and a ferocious activist investor. Icahn is recognized for his bold investment strategies, where he purchases a share in a company and leverages his power to achieve quick gains in the company’s stock value. This frequently includes participating in proxy battles, issuing public requests, and initiating a takeover campaign.
Likewise, he boasts of one of the most impressive track records on Wall Street, with his investment firm, Icahn Enterprises, having generated an annualized rate of return of about 14% between 2000 and 2022, according to Financhil. In contrast, the S&P 500 enjoyed an average annual return of 6% over the same period, while Buffett’s Berkshire Hathaway recorded an annualized return of about 9%.
Similarly, Icahn has seen an impressive 31% annualized return since 1968. Meanwhile, Buffett achieved a return of 19.5% over a similar timeframe. However, when considering the power of compounding, Buffett’s wealth generated from investment returns is significantly less than that of Icahn. Icahn’s investment prowess has led to a return of $65 for every $1 generated by Buffett.
The high returns that Icahn has succeeded in generating stem from implementing a high-risk, high-reward strategy. Therefore, Billionaire Icahn’s top 10 stocks involve stocks likely to benefit from short-term volatility to generate big gains.
Similarly, Icahn has never avoided cutting his losses when things go wrong. The corporate raider was forced to sell all his equity stakes in one of his holdings when the company filed for bankruptcy in 2020.
Unlike most hedge fund managers, Icahn focuses on an opportunistic investment strategy rather than on specific sectors. In this case, billionaire Icahn’s top 10 stocks are usually spread across various sectors, from technology to healthcare and energy. He also takes a keen interest in companies undergoing restructuring or radical changes.
Icahn has consistently advocated for change within company boards as a corporate raider and activist shareholder throughout his career. However, in recent years, he has experienced a reversal of fortune.
Icahn’s publicly listed firm faced significant scrutiny in 2023 when it was the focus of criticism from short-seller Hindenburg Research, which alleged that the company was overvalued and engaged in a Ponzi-like economic scheme.
In its report, Hindenburg alleged that Icahn has been running a Ponzi-like scheme by taking money from new investors to pay dividends to old investors. The allegations have since escalated, with the US Securities and Exchange saying that the billionaire investor had pledged up to 82% of shares in his companies to secure billions of dollars of margin loans.
“Hindenburg’s modus operandi, which is to publish scurrilous and unsupported allegations, did damage to IEP and its investors. We are glad to put this matter behind us and will continue to focus on operating the business for the benefit of unit holders,” said Icahn, according to CNN.
Icahn and his firm have since agreed to settle the charges for failing to disclose pledges of the company’s securities as collateral in billions of dollars worth of personal loans. Consequently, Icahn and his company will pay $1.5 million and $500,000 in civil penalties to settle the charges.
With this background in mind, let’s delve into billionaire Icahn’s portfolio and his top 10 stock picks.
Carl Icahn of Icahn Capital
Our Methodology
To compile the list of billionaire Icahn’s top 10 stocks, we screened Carl Icahn’s investment portfolio and scanned for his biggest holdings. Next, we ranked the stocks based on the value of the billionaire investor’s stakes in the company, as of Q2 2024. The stocks are ranked in ascending order.
We also mentioned the total number of hedge funds that had bought these stocks per Insider Monkey’s data. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Billionaire Carl Icahn’s Top 10 Stocks
10. Caesars Entertainment, Inc. (NASDAQ:CZR)
Icahn Capital LP’s Equity Stake: $96.97 million
Number of Hedge Fund Holders: 54
Caesars Entertainment, Inc. (NASDAQ:CZR) sums up billionaire Icahn’s top 10 stocks as a consumer cyclical investment play. As a gaming and hospitality company, it leases and manages domestic properties, slot machines, video lottery terminals, and e-tables.
Icahn acquired stakes in the casino operator early this year while insisting that he liked the stock and was unprepared to do any activism. It was the second time the billionaire had acquired stakes in the company, having acquired first in 2019 and pushed for its sale as part of activist campaigns.
The investment came as Caesars Entertainment, Inc. (NASDAQ:CZR) implemented numerous important plans to recover and expand the business post-pandemic. A primary emphasis has been extending its online gaming and sports betting systems to capture a larger portion of the growing digital gaming market. This venture is meant to take advantage of the notable expansion in online gaming and provide a fresh income source.
In addition to expanding its online presence, Caesars Entertainment, Inc. (NASDAQ:CZR) has been actively reducing its debt, which became crucial following its 2020 acquisition of Eldorado Resorts. This strategy involves selling assets not central to its operations and restructuring existing debt to enhance the company’s financial health. Achieving better operational adaptability and financial health necessitates these steps.
For its second quarter, the company reported a loss of $0.56 per share. Despite this, its revenues totaled $2.83 billion, falling short of the market’s expectations of $2.86 billion. Its same-store adjusted EBITDA totaled $1 billion, while its Digital adjusted EBITDA totaled $40 million, marking a 263.6% increase compared to the previous year.
The company is still hopeful for the remainder of 2024, buoyed by strong performance in Las Vegas and Caesars Digital, anticipation of the Danville location’s launch, and a $430 million investment in the newly renamed Caesars New Orleans property.
While trading at a trailing price-earnings multiple of 11, Caesars Entertainment, Inc. (NASDAQ:CZR) appears undervalued compared to the average P/E of 15 for stocks in the consumer cyclical sector.
Hedge sentiment was negative toward Caesars Entertainment, Inc. (NASDAQ:CZR) in the second quarter of 2024, as 54 hedge funds held positions in the stock, compared to 57 funds’ positions in the preceding quarter. As of the second quarter of 2024, HG Vora Capital Management is the top shareholder in the company and has a position worth $131.14 million.
Here is what Baron Funds said about Caesars Entertainment, Inc. (NASDAQ:CZR) in its fourth quarter 2023 investor letter:
“In the most recent quarter, we acquired additional shares in Caesars Entertainment, Inc. (NASDAQ:CZR), the largest casino-entertainment company in the U.S. and one of the world’s most diversified casino-entertainment providers. We are big fans of CEO Tom Reeg and remain optimistic about the long-term prospects for the company.
The company operates primarily under the Caesars, Harrah’s, Horseshoe, and Eldorado brand names. The company generates approximately 50% of its cash flow from Las Vegas and 50% from regional destination markets. The company owns approximately half of its real estate and leases the other half from gaming REIT companies – Gaming and Leisure Properties, Inc. and VICI Properties Inc…” (Click here to read the full article)
9. American Electric Power Company, Inc. (NASDAQ:AEP)
Icahn Capital LP’s Equity Stake: $105.75 Million
Number of Hedge Fund Holders: 35
American Electric Power Company, Inc. (NASDAQ:AEP) is a significant power company in the U.S. It ranks among the top electric utilities, delivering power to numerous clients in 11 states. The firm manages various energy production facilities, encompassing coal, natural gas, nuclear, and green energy options.
After acquiring stakes in the U.S. utility company, Icahn engineered an activist campaign that resulted in the ousting of the then-CEO. The company was forced to appoint a new CEO, and the billionaire investor got two seats on the board.
The company delivered solid second-quarter financial results as its investments in modern, affordable, and reliable energy systems continue to benefit customers and communities. American Electric Power Company, Inc. (NASDAQ:AEP) is experiencing record-breaking growth in some regions of our service area, thanks to a robust transmission system and emphasis on economic growth.
Business demand rose by 12.4% compared to the previous year’s second quarter, propelled by a more than 20% increase in our Transmission & Distribution divisions following the launch of new data centers.
Likewise, the company delivered $4.6 billion in revenue in the quarter, up from $4.4 billion delivered last year. Earnings per share rose to $1.25 from $1.13 delivered the same quarter the previous year. American Electric Power Company, Inc.’s (NASDAQ:AEP) strong performance can be linked to its solid first-quarter outcomes, encouraging outlook for the entire year, and increasing need for power from industrial plants and data hubs fueled by artificial intelligence and various other technologies.
While trading at a price-to-earnings multiple of 17, American Electric Power Company, Inc. (NASDAQ:AEP) appears undervalued, given that the average P/E in the utility sector is 21. Additionally, the stock rewards investors with a 3.57% dividend yield.
According to Insider Monkey’s second-quarter database, 35 hedge funds held stakes in American Electric Power Company, Inc. (NASDAQ:AEP), compared to 29 funds in the last quarter. Rajiv Jain’s GQG Partners is a prominent stakeholder of the company, with approximately 9.58 million shares worth $840.75 million.
8. JetBlue Airways Corporation (NASDAQ:JBLU)
Icahn Capital LP’s Equity Stake: $107.96 Million
Number of Hedge Fund Holders: 19
JetBlue Airways Corporation (NASDAQ:JBLU) is one of billionaire Icahn’s top 10 industrial stocks. The company offers air transportation services. Early in the year, Carl Icahn disclosed a 10% stake in the airline giant and initiated an activist campaign to reinvigorate the company’s fortune.
Icahn acquired stakes in the company when it faced growth challenges after federal regulators blocked its plan to acquire Spirit Airlines for $3.8 billion. Nevertheless, the billionaire investor reiterated that the airline was fairly undervalued and represented an attractive investment opportunity.
JetBlue Airways Corporation (NASDAQ:JBLU) has moved to strengthen its growth prospects by upgrading its aircraft fleet with the debut of the Airbus A321neo and the start of transatlantic flights to London. Its achievements are further emphasized by the growth of the Mint service from Newark, which is projected to save $75 million by 2024.
Its dedication to lowering its debt is praiseworthy. The company’s long-term debt-to-equity ratio (a gauge of financial leverage) is 52.2% lower than the industry average, showing a robust financial position.
The airline delivered a $25 million profit in the second quarter, down by 82% year over year. Nevertheless, it was a surprise as analysts expected the company to post a loss. The airline has announced plans to cut costs to rebuild its business and bolster profit margins. It has already announced plans to delay the purchase of $3 billion worth of airplanes as it seeks to generate a gross profit of between $800 million and $900 million.
JetBlue Airways Corporation (NASDAQ:JBLU) remains one of billionaire Icahn’s top 10 stocks as it embarks on a strategy to return to profitability while restoring balance sheet health.
As of Q2 2024, JetBlue Airways Corporation (NASDAQ:JBLU) shares were held by 19 out of 912 hedge funds tracked by Insider Monkey. Its largest shareholder was Carl Icahn’s Icahn Capital LP, which owned 17.73 million shares valued at $107.96 million.
7. Dana Incorporated (NYSE:DAN)
Icahn Capital LP’s Equity Stake: $173.15 Million
Number of Hedge Fund Holders: 25
Dana Incorporated (NYSE:DAN) is a consumer cyclical company that provides power conveyance and energy management solutions for vehicles and machinery. It offers drive systems like driveshafts, transmissions, wheel and track drives, and motion systems such as winches.
Dana Incorporated (NYSE:DAN) delivered solid second-quarter results despite rising inflation and a dip in demand for electric vehicles (E.V.s). The firm’s revenue stayed on par with the previous year, reaching $2.7 billion, and its adjusted EBITDA was strong at $244 million. Nonetheless, Dana’s cash flow of $104 million dropped by $30 million compared to the last quarter, attributed to changes in payment schedules.
The firm’s financial projections for the entire year have been slightly adjusted. With a narrower sales range but a 33% increase in the expected cash flow, the firm showcases optimism in its operational strength and market approach.
Even with reduced sales forecasts, Dana Incorporated (NYSE:DAN) anticipates fulfilling its promise to generate $925 million in profits. The firm is persistently acquiring new clients in various regions in conventional, mixed, and electric vehicle sectors.
Dana has consistently paid dividends for 13 years, and its dividend yield is currently quite appealing at 3.64%. Moreover, Dana’s liquid assets surpass its immediate financial commitments, showing a strong financial stance in handling short-term debts.
Dana Incorporated (NYSE:DAN) has traded at a price-to-book value of 1.02 over the last year, ending in Q2 2024. Although the company has faced challenges in making profits over the past year, with gross profit margins dipping to 8.45%, analysts are optimistic that it will regain profitability this year, which might prompt investors to reassess the company’s stock.
According to Insider Monkey’s second-quarter database, 25 hedge funds were bullish on Dana Incorporated (NYSE:DAN), compared to 27 funds in the prior quarter. Carl Icahn’s Icahn Capital LP is the biggest position holder in the company, with 14.29 million shares worth $173.15 million.
6. Bausch Health Companies Inc. (NYSE:BHC)
Icahn Capital LP’s Equity Stake: $242.01 Million
Number of Hedge Fund Holders: 32
Bausch Health Companies (NYSE:BHC) is one of billionaire Icahn’s top 10 stocks in the healthcare sector. As a diversified specialty pharmaceutical and medical device company, it develops, manufactures, and markets a range of products, primarily in gastroenterology, hepatology, neurology, dermatology, and international pharmaceuticals.
Bausch Health Companies (NYSE:BHC) delivered solid second-quarter results, with net revenue increasing 6% year-over-year to $1.19 billion. This growth was driven by organic expansion and strong performance in key areas, with Xifaxan leading the charge with a 10% increase year-over-year.
The Asia Pacific market is becoming an important part of the equation, having delivered a 19% increase in sales during the period. The company’s impressive revenue growth, coupled with its solid international presence, is noteworthy.
Bausch Health Companies (NYSE:BHC) stands out as one of billionaire Icahn’s top 10 stocks owing to its ability to grow earnings over the past five years. The company’s adjusted EBITDA rose 8% year-over-year, reaching $614 million. Bausch Health also secured a solid operating cash flow of $380 million, attributed to its improved business operations and favorable cash flow management.
At its current valuation, BHC is considered undervalued. It trades at just 1.6 times its forward earnings, representing a significant discount to its industry average. Furthermore, analysts expect the company’s earnings to grow by 2% this year, reaching $1.04 billion.
Insider Monkey reviewed the second quarter 2024 shareholdings of 912 hedge funds and discovered that 32 of them had invested in the firm. Bausch Health Companies Inc. (NYSE:BHC)’s largest hedge fund shareholder is Carl Icahn’s Icahn Capital LP through its $242.01 million stake.
5. CVR Partners, LP (NYSE:UAN)
Icahn Capital LP’s Equity Stake: $294.47 Million
Number of Hedge Fund Holders: 4
CVR Partners, LP (NYSE:UAN) is a basic materials company that produces and sells nitrogen fertilizer. It is one of billionaire Icahn’s top 10 stocks specializing in offering ammonia products for agricultural and industrial customers.
Billionaire investor Icahn acquired stakes in the basic materials company in the first quarter as he sought to take advantage of the company’s high dividend yield of 10.07%. Additionally, CVR Partners, LP (NYSE:UAN) appears fairly valued while trading at an earnings multiple of 14.
The company delivered strong results for the second quarter of 2024, recording a net income of $26 million, or $2.48 per unit, and an EBITDA of $54 million from sales of $133 million. The company increased its combined ammonia production to 102%, producing 221,000 tons of ammonia and 337,000 tons of UAN.
CVR Partners, LP (NYSE:UAN) is well positioned to deliver better-than-expected results for the rest of the year, going by the strong demand for nitrogen fertilizer at prices higher than 2023. Therefore, it should generate more free cash flow to continue rewarding its investors with higher dividend payouts.
By the end of this year’s second quarter, four of the 912 hedge funds part of Insider Monkey’s database had invested in CVR Partners, LP (NYSE:UAN). The firm’s largest shareholder is Carl Icahn’s Icahn Capital LP, with a $294.47 million stake.
4. International Flavors & Fragrances Inc. (NYSE:IFF)
Icahn Capital LP’s Equity Stake: $357.04 Million
Number of Hedge Fund Holders: 46
International Flavors & Fragrances Inc. (NYSE:IFF) is a basic materials company that manufactures and sells cosmetic actives and natural health ingredients for use in various consumer products. It offers natural and plant-based specialty food ingredients, such as flavor compounds used in savory products, beverages, sweets, and dairy products.
The company remains focused on driving volume growth in its core business, which is supported by enhanced productivity initiatives. Consequently, it delivered solid second-quarter results, with earnings per share at $1.6, above consensus estimates of $1.01. Revenue totaled $2.89 billion, exceeding Wall Street’s forecast of $2.82 billion. Cash flows from operations at the end of the second quarter totaled $336 million, and free cash flow was $136 million.
International Flavors & Fragrances Inc. (NYSE:IFF) raised its guidance for the entire year and now anticipates sales between $11.1 billion and $11.3 billion, up from the previous range of $10.8 billion to $11.1 billion. Additionally, it expects adjusted operating EBITDA to range from $2.1 billion to $2.17 billion, an increase from the previous range of $1.9 billion to $2.1 billion.
The improved guidance indicates that International Flavors & Fragrances Inc. (NYSE:IFF) is in a robust growth phase and should continue generating more shareholder value. As one of billionaire Icahn’s top 10 stocks, IFF rewards investors with a 1.59% dividend yield while trading at a price-to-earnings multiple of 24, which is in line with the industry’s average of 25.
46 of the 912 hedge funds in Insider Monkey’s Q2 2024 database were the firm’s shareholders. International Flavors & Fragrances Inc. (NYSE:IFF)’s biggest hedge fund investor is Israel Englander’s Millennium Management, which owns $411.32 million worth of shares.
3. Southwest Gas Holdings, Inc. (NYSE:SWX)
Icahn Capital LP’s Equity Stake: $775.77 Million
Number of Hedge Fund Holders: 46
Southwest Gas Holdings, Inc. (NYSE:SWX) is one of Billionaire Icahn’s top 10 utilities stocks. It specializes in distributing and transporting natural gas. It also provides trenching, installation, and replacement of underground pipes and maintenance services for energy distribution systems.
In its second quarter, the company reported a significant improvement in its utility operating margin, raising its annual net income to $4 million. The utility margin increased by $11 million, attributed to a recovery in investments in Nevada and customer growth.
Southwest Gas Holdings, Inc. (NYSE:SWX)’s revenues have experienced a modest rise, showing a 2.19% increase in the past year as of the first quarter of 2024. Although the revenue growth for each quarter saw a small decline of -1.39% in the first quarter of 2024, the general upward movement in earnings suggests the firm’s strength and capacity to maneuver through economic changes.
Southwest Gas Holdings, Inc. (NYSE:SWX) boasts a strong balance sheet, with a significant cash position of $600 million and limited debt financing needs through 2026. The strong balance sheet has been the catalyst behind the company’s maintaining dividend payments for over half a century and raising them for 17 consecutive years.
Currently, the stock boasts a dividend yield of 3.42% while trading at a price-to-earnings multiple of 24, which suggests it might be trading at a discount relative to its earnings growth potential.
At the end of Q2 2024, 46 hedge funds tracked by Insider Monkey reported having stakes in Southwest Gas Holdings, Inc. (NYSE:SWX), compared with 20 in the previous quarter. With over 11.02 million shares, Icahn Capital LP was the company’s leading stakeholder in Q2.
2. CVR Energy Inc. (NYSE:CVI)
Icahn Capital LP’s Equity Stake: $1.78 Billion
Number of Hedge Fund Holders: 15
CVR Energy, Inc. (NYSE:CVI) is the second biggest holding in Carl Icahn’s portfolio, offering exposure in the energy sector, especially in the petroleum refining and marketing business. The company refines and supplies gasoline, crude oil, distillate, diesel fuel, and other refined products. It also operates an E-Nitrogen Fertilizer segment that owns and operates a nitrogen fertilizer plant in North America.
Icahn controls about 66% of the company’s shares, affirming his strong bet in the energy sector. CVR Energy, Inc. (NYSE:CVI) has sought to strengthen its prospects in the refining business by submitting an offer for the purchase of the parent company of Venezuela-owned Citgo Petroleum.
The company delivered disappointing second-quarter financial results, with net income attributable to shareholders dropping to $21 million or 21 cents a share from $130 million or 1.29 a share delivered the same quarter last year.
The disappointing results were attributable to lower refining margins due to a decrease in the Group 3 2-1-1 crack spread and reduced throughputs related to a fire at the Wynnewood refinery during severe weather.
According to Insider Monkey’s second-quarter database, 15 hedge funds were bullish on CVR Energy, Inc. (NYSE:CVI), compared to 20 funds in the prior quarter. Carl Icahn’s Icahn Capital LP is the largest stakeholder of the company.
1. Icahn Enterprises LP Common Stock (NASDAQ:IEP)
Icahn Capital LP’s Equity Stake: $6.69 billion
Number of Hedge Fund Holders: 3
Icahn Enterprises LP Common Stock (NASDAQ:IEP) is Carl Icahn’s largest holding. It operates as an Investment Company in the energy, automotive, food, packaging, real estate, home fashion, and Pharmaceutical business. The company’s investment segment invests capital in various private investment funds.
After announcing plans to sell up to $400 million in depository units through an at-the-market offering, the company has come under pressure. The company says it plans to raise the financing to fund potential acquisitions and for company purposes.
Icahn Enterprises LP Common Stock (NASDAQ:IEP) continues to clash with short-seller Hindenburg Research, which has previously accused Icahn of operating a scheme similar to a Ponzi scheme by overvaluing its assets to fund dividends. Hindenburg also questioned Icahn’s practice of margin borrowing.
On the other hand, the investment firm delivered mixed second-quarter results, having experienced a decline in its net asset value and mixed results in various industries. The company delivered a net loss of $331 million and saw its net asset value decrease by $969 million during this period, and the energy sector saw its EBITDA drop to $46 million.
Despite the mixed results, Icahn Enterprises LP Common Stock (NASDAQ:IEP) is still optimistic about its future performance and the possibility of increasing profits in its service sector.
Amid the disappointment, Icahn Enterprises LP Common Stock (NASDAQ:IEP) continues to reward investors with a 28.90% dividend yield while trading at a price-to-earnings multiple of 28, above the energy sector’s P/E of 13.
As of the end of the second quarter of 2024, just three hedge funds had stakes in Icahn Enterprises LP Common Stock (NASDAQ:IEP). Carl Icahn’s Icahn Capital LP remains the most prominent holder, with stakes worth $6.70 billion.
Billionaire Icahn’s top 10 stocks offer insights on some of the top stock picks in various sectors, ideal for any investor looking to diversify their investment portfolio. However, given that the artificial intelligence arms race is just but starting, there are under-the-radar AI stocks trading at highly discounted valuations that hold greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than the top activist investment plays, check out our report about the cheapest AI stock.
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