In this article, we will take a look at the top 10 stock picks in Carl Icahn’s portfolio.
Billionaire hedge fund manager Carl Icahn was known as a corporate raider in the 1980s, although he is now more commonly referred to as an activist investor. Icahn is a relentless and self-consciously contrarian investor with a keen eye for undervalued opportunities. Valuing hard assets, he has often stated that he prefers to purchase unglamorous, out-of-favor companies. The same is true for his investment wheel, Icahn Capital LP, which is well-known for its aggressive and high-stakes activism efforts, establishing itself as one of the world’s most powerful and prominent hedge funds. Boasting an impressive track record, the billionaire investor achieved an average annualized return of 14% between 2000 and 2022, outperforming the S&P 500 by 6%.
One of the most well-known examples of Icahn’s corporate raiding is his aggressive purchase of TWA in 1985. He obtained a majority share in the airline and then fought bitterly with management over the company’s future. Despite criticism from TWA management, Icahn eventually emerged triumphant, turning the firm around and increasing its worth. Another significant example of Icahn’s activism was his participation in the Dell acquisition in 2013. Icahn invested heavily in the firm and then mounted a public campaign opposing Michael Dell and Silver Lake Partners’ proposed takeover. Icahn claimed that the planned takeover undervalued the firm and sought that the buyout price be raised.
Although the 89-year-old investor earned a name for himself (alongside billions of dollars) by criticizing business executives’ policies and plans and advocating for reform within firms, it appears that the tide has shifted, as Icahn is now under heavy scrutiny from Wall Street investors, who are swiftly dumping his company’s shares. Shares of Icahn Enterprises, his publicly traded investment business, have fallen more than 48% in the last year. Shares began to fall in May 2023, when Nate Anderson’s short-selling firm, Hindenburg Research, issued a study doubting the company’s financials. Among other things, Hindenburg accused the company of paying an unsustainable dividend. In a September 2024 interview, Anderson predicted that its shares would continue to plummet, claiming Icahn’s frequent use of personal debts remains a threat to the company’s viability. As an illustration of the troubles the activist investor faces, Icahn Capital LP saw losses exceeding $3 billion from Q4 2023 to Q4 2024.
Carl Icahn of Icahn Capital
Our Methodology
For our list of Carl Icahn’s top stock picks, we scanned the legendary investor’s 13F portfolio at the end of Q4 2024. We ranked the top 10 stocks in ascending order based on the value of Icahn Capital’s stake in them as of the end of the quarter.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Caesars Entertainment Inc. (NASDAQ:CZR)
Carl Icahn’s Q4 2024 Stake: $81.54 million
Caesars Entertainment Inc. (NASDAQ:CZR) is an American gambling and casino entertainment corporation that provides a variety of gaming, entertainment, and hospitality facilities, as well as a wide range of online gaming and sports betting options. One of the most well-known casino entertainment companies, it runs resorts under the Caesars, Harrah’s, Horseshoe, and Eldorado brands.
On February 19, Jefferies analyst David Katz issued a Buy rating on the CZR stock based on a number of variables impacting Caesars Entertainment’s possible future success. Despite short-term issues, notably in the regional gaming portfolio and internet business segment, which have been hurt by recent poor sporting events, Katz remains hopeful that these areas will recover by 2025. The digital segment is predicted to grow as a result of greater iGaming performance and lower promotional costs, while the regional portfolio might benefit from a more competitive climate and new efforts in certain locations. Furthermore, Caesars’ Las Vegas operations are predicted to stay stable, aided by a strong presence on The Strip and a recovering convention sector.
Caesars Entertainment Inc. (NASDAQ:CZR) recently announced its Q4 and full-year 2024 results, which showed varied performance across segments. Q4 saw GAAP net revenues of $2.80 billion, slightly down from $2.83 billion year-over-year, while attaining net profits of $11 million compared to a loss of $72 million the previous year. For the full fiscal year 2024, the firm reported net revenues of $11.2 billion, down from $11.5 billion in 2023, with a net loss of $278 million compared to a net income of $786 million the previous year. On the other hand, the business used the revenues from the WSOP and Promenade sales to pay down $500 million in debt and repurchase $50 million in shares.
9. American Electric Power Company Inc. (NASDAQ:AEP)
Carl Icahn’s Q4 2024 Stake: $111.1 million
American Electric Power Company, Inc. (NASDAQ:AEP), based in Columbus, Ohio, provides dependable and inexpensive power to 5.6 million consumers in 11 states. The firm maintains the biggest electric transmission system in the United States, covering more than 40,000 miles, and continues to make substantial investments in renewable energy efforts.
American Electric Power Company, Inc. (NASDAQ:AEP) recently announced a $54 billion capital plan for 2025-2029 as well, which represents a 25% increase over the previous five-year plan. This investment is mostly directed toward infrastructure and new generation.
American Electric Power Company, Inc. (NASDAQ:AEP) published Q4 2024 earnings on February 13, which fell short of analysts’ estimates. The company reported profits per share of $1.24, a touch below the projected $1.25, and revenues of $4.69 billion, below the expected $4.87 billion. However, although the company faced a quarterly setback, AEP reported a healthy 7% growth in annual profits and raised its quarterly dividend from $0.88 to $0.93 per share. The company also voiced confidence for 2025, forecasting operating earnings of $5.75 to $5.95 per share and $54 billion in capital investment through 2029.