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.
8. JetBlue Airways Corporation (NASDAQ:JBLU)
Carl Icahn’s Q4 2024 Stake: $139.3 million
JetBlue Airways Corporation (NASDAQ:JBLU) is a major American low-cost airline operator. Based in New York, the airline offers air transportation to over 100 destinations in the United States, the Caribbean and Latin America, Canada, and Europe. The firm is well-known for its focus on client satisfaction, which includes providing facilities that include in-flight entertainment and comfortable seats, while maintaining a cheap ticket structure.
Seaport Global Securities downgraded JetBlue Airways Corporation (NASDAQ:JBLU) from Buy to Neutral in January. Analyst Daniel McKenzie noted ongoing worries about Pratt & Whitney (P&W) engine failures, which have led to an increase in aircraft groundings and hampered the airline’s earnings recovery. The firm’s original Buy recommendation back in 2020 was based on the premise that JetBlue could potentially be one of the first airlines to recover normalized profitability following the pandemic, given its notable exposure to domestic and leisure demand. That said, JetBlue’s operating environment has transformed, with the airline suffering disproportionately from post-COVID supply chain delays and higher-than-expected labor cost inflation.
7. Dana Inc. (NYSE:DAN)
Carl Icahn’s Q4 2024 Stake: $165.1 million
Dana Inc. (NYSE:DAN) offers power conveyance and energy management systems for automobiles and industry. The firm works in four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies.
On January 27, UBS analyst Joseph Spak raised the price target for Dana Inc. (NYSE:DAN) shares from $18 to $20, while maintaining a Buy rating on the company. The adjustment comes after Dana’s recent business update, which revealed higher cost reductions than expected. The analyst believes that Dana might have around $900 million in capacity to reach the desired leverage ratio.
Dana Inc. (NYSE:DAN) revealed adjusted profits per share of $0.25 in Q4, which surpassed analyst expectations of $0.10. However, revenues for the quarter fell short of expectations, totaling $2.34 billion. Looking forward to this year, the company sees earnings per share reaching between $1.40 and $1.90, which is higher than the consensus projection of $1.20. Dana Inc. (NYSE:DAN) also expects 2025 revenues to be between $9.525 billion and $10.025 billion, compared to a consensus estimate of $9.651 billion.
6. Bausch Health Companies Inc. (NYSE:BHC)
Carl Icahn’s Q4 2024 Stake: $279.85 million
Bausch Health Companies Inc. (NYSE:BHC) is a multinational pharmaceutical corporation that develops and distributes prescription medications, over-the-counter treatments, and medical devices for eye health, gastroenterology, dermatology, and neurology.
In the last quarter of 2024, Bausch Health Companies Inc. (NYSE:BHC) reported revenues of $2.56 billion, an increase of 9% organically, while full-year revenue came in at $9.63 billion, a 10% increase. The company also reported GAAP net income of $93 million during the quarter, although it ended the year with a net loss of $46 million.
On February 21, Jason Gerberry, an analyst at Bank of America Securities, confirmed his Sell rating on Bausch Health Companies Inc. (NYSE:BHC), with a price target of $7. The analyst’s rating is based on a number of variables, the primary of which is Bausch Health Companies’ future prognosis. While the firm beat expectations with its 4Q/FY25 prediction, the increase was primarily driven by its Xifaxan brand, which is expected to lose exclusivity in January 2028, or maybe earlier. This raises concerns about Bausch’s ability to continue growth once Xifaxan’s exclusivity expires, since there are no apparent growth drivers to replace the massive revenue contribution from the medicine.
5. CVR Partners, LP (NYSE:UAN)
Carl Icahn’s Q4 2024 Stake: $308.86 million
CVR Partners, LP (NYSE:UAN) is a basic materials company that manufactures and distributes nitrogen fertilizer products. The company sells ammonia to both industrial and agricultural clients, as well as urea ammonium nitrate to agricultural consumers.
CVR Partners, LP (NYSE:UAN) released Q4 2024 earnings that surpassed analysts’ estimates, with an EPS of $1.73 and quarterly revenues of $139.56 million. CVR Partners anticipates that maintenance capital spending will be between $35 million and $45 million in 2025, with expansion capital investment ranging from $20 million to $25 million. The company anticipates strong demand for nitrogen fertilizer in the spring, with an ammonia consumption rate of 95-100% in Q1 2025.
CVR Partners, LP (NYSE:UAN), trading at a price-to-earnings ratio of 13.51, has been one of Carl Icahn’s top stocks for 2024 on account of its steady dividend returns. As of February 26, the company’s dividend yield was a healthy 8.68%.
4. International Flavors & Fragrances Inc. (NYSE:IFF)
Carl Icahn’s Q4 2024 Stake: $317 million
International Flavors & Fragrances (NYSE:IFF) is a New York-based company that operates as a global leader in providing creative solutions to the food, health, beauty, and pharmaceutical industries. Nourish, Health & Biosciences, Scent, and Pharma Solutions are the company’s four core business segments.
International Flavors & Fragrances Inc. (NYSE:IFF) recently announced a $70 million investment to expand its Cedar Rapids, Iowa, factory and boost its position in the healthy snack industry. The 47,000-square-foot facility improvement is projected to be completely operational by the second half of 2026. The expansion will allow IFF to produce its TAURA by IFF fruit ingredients domestically, giving it a competitive advantage in the industry.
Furthermore, International Flavors & Fragrances Inc. (NYSE:IFF) reported higher-than-expected results for the fourth quarter of 2024, with earnings per share of $0.97, above the prediction of $0.82. Revenue for the quarter was $2.8 billion, beating expectations of $2.69 billion.
3. Southwest Gas Holdings, Inc. (NYSE:SWX)
Carl Icahn’s Q4 2024 Stake: $681.1 million
Southwest Gas Holdings, Inc. (NYSE:SWX) is a gas utility based in Las Vegas, Nevada. Over 2 million residential, commercial, and industrial clients in Arizona, Nevada, and California rely on the company’s natural gas services.
Southwest Gas Holdings, Inc. (NYSE:SWX) demonstrated resilience in the fourth quarter of 2024, increasing its utility operating profit by $72.5 million for the year. The rise was fueled mostly by $66 million in rate cuts in Nevada and California, as well as a $12 million lift from higher consumer traffic. The firm also managed a slight 2% increase in operating and maintenance expenditures, keeping them below inflation.
Despite the earnings surprise delivered on February 26, Southwest Gas Holdings, Inc. (NYSE:SWX) shares fell 3.02% in premarket trading, closing at $77.28. This fall happened as investors weighed the quarterly performance against broader market conditions and the company’s future prospects. That said, the stock remains within its 52-week range, with highs of $80.29 and lows of $62.48.
O’keefe Stevens Advisory stated the following regarding Southwest Gas Holdings, Inc. (NYSE:SWX) in its Q3 2024 investor letter:
“Southwest Gas Holdings, Inc. (NYSE:SWX) – In our income portfolio, we initiated a position in Southwest Gas Corporation, a utility provider in Nevada, Arizona, California, and Utah. Florida has become less affordable due to higher insurance costs (in parts, unable to get) and rising HOA fees. And as desirability declines resulting from increasing natural disasters. The likelihood of future retirees opting for locations where they do not have to worry about their house getting destroyed or moving into a residential complex that could become unaffordable on a fixed income will result in a generation no longer retiring in the southeast—instead, the West. Population growth will drive incremental power demand in Southwest’s regions.
Anecdotal conversations with friends cited the inability to close on a home in Florida as they could either not find insurance or the quote made the home unaffordable. While Florida has a beneficial tax code, making it cheaper on the surface to live relative to Arizona and Nevada, the cost of living differential is slowly eroding these benefits, which is unlikely to reverse…” (Click here to read the full text)
2. CVR Energy Inc. (NYSE:CVI)
Carl Icahn’s Q4 2024 Stake: $1.24 billion
CVR Energy Inc. (NYSE:CVI) headquartered in Sugar Land, Texas, is a diversified holding company that specializes in renewable fuels, petroleum refining and marketing, and nitrogen fertilizer manufacturing via its stake in CVR Partners, LP.
The petroleum refining and nitrogen fertilizer manufacturing company reported a narrower adjusted loss per share of $0.13, compared to analysts’ forecasts of $0.42. Revenue for the quarter was $1.95 billion, slightly higher than the $1.93 billion expectation. Despite a year-over-year decrease in net income for both the fourth quarter and the full year, CVR Energy’s performance in the fourth quarter demonstrated resilience, with a net income of $28 million, compared to $91 million in the same period the previous year.
Following these findings, Scotiabank analyst Paul Y. Cheng emphasized the company’s robust refining operations and income tax gain, which greatly outweighed pre-tax earnings. However, Cheng said that the first-quarter outlook for refining in 2025 looks to be poorer than predicted, with projected throughput lower than previously estimated.
1. Icahn Enterprises LP (NASDAQ:IEP)
Carl Icahn’s Q4 2024 Stake: $3.9 billion
Icahn Enterprises LP (NASDAQ:IEP) is Carl Icahn’s largest holding and investing company. It engages in a variety of industries, including investing, energy, automotive, real estate, and medicines, among others.
Notably, the company pays a dividend of $0.50 per share while delivering a 19.94% yield, one of the highest in the market, and one of the reasons why the company continues to draw income-focused investors. On the opposite end, it is also one of the reasons why the company’s detractors criticize Carl Icahn.
Icahn Enterprises LP (NASDAQ:IEP) announced a smaller fourth-quarter net loss on February 26, meeting analyst estimates despite a minor sales dip. The diversified holding company had a net loss of $98 million, or $0.19 per depositary unit, in the fourth quarter of 2024. This is compared to a $139 million net loss, or $0.33 per unit, in the same period last year. Revenue also declined somewhat, to $2.6 billion from $2.7 billion the previous year. However, Icahn Enterprises’ adjusted EBITDA increased to $12 million from $9 million in Q4 2023.
While we acknowledge the potential of IEP, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IEP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
