Out of the thousands of hedge funds out there, it’s easy to miss some of the high-flyers. The media primarily covers bigger funds run by activists or billionaires, because they have a longer track record and because the public is more interested in the stock picks and other actions of investors who made a fortune on the stock market. This in turn leads to many potential future stars being overlooked. For example, how many stories have you read about Bill Ackman‘s disastrous bet on Valeant Pharmaceuticals Intl Inc (NYSE:VRX)? Probably a lot. But have you heard about a fund named Sarissa Capital Management led by Alex Denner? Probably not. Sarissa Capital’s stock picks managed to return more than 200% over the last year according to our calculations, including 53% gains year-to-date.
It’s important to identify smaller and lesser known hedge funds in advance, before investors pile into them and they have to expand their portfolios and buy more large- and mega-cap stocks in order to become more risk-averse. This is what we do at Insider Monkey. We follow over 700 different hedge funds and institutional investors and identify their winning picks, which we share in our quarterly newsletters. Our flagship strategy that involves imitating certain stock picks of the funds tracked by us, has returned 44.2% since February 2016, beating the S&P 500 by nearly 15 percentage points. Our latest stock picks made in February have already outperformed the market by 5 percentage points in the last three months and our newest picks are being released today. We are also offering a 14-day money-back guarantee on our premium newsletters, plus you can get $90 off by using this link, so don’t miss this chance to check out our latest picks risk-free and see if Insider Monkey’s simple and effective small-cap strategy would make a good addition to your portfolio.
One investor that has been in the spotlight more than usual lately is billionaire activist Carl Icahn. Icahn is one of the most successful and well-known activists on the Street, as well as one of the most feared by corporate boards. However, lately he has been followed for his involvement in politics. Icahn voiced his support for Donald Trump during the presidential campaign and has earned a place as a special adviser on regulatory matters in the Trump administration. However, the overlap between Icahn’s business and the special adviser position has raised some questions on the Hill. Last week, eight Democratic senators requested an investigation into some of Icahn’s dealings in relation to CVR Energy, Inc. (NYSE:CVI), a company that is majority-owned by Icahn. As an oil refiner, CVR Energy is required to buy credits for renewable fuels and it is alleged that the company timed the trading of these credits based on information obtained from Icahn, who in turn affected their price through his position. Among other things, Icahn played a role in the nomination of Scott Pruitt (a climate change denier) as the head of the EPA. Pruitt has also criticized the renewable fuel credit program.
On the other hand, our data shows that Icahn’s returns have been somewhat lagging lately, the fund’s stock picks having lost 3.64% year-to-date according to our calculations, which analyze a fund’s positions in companies with market caps above $1 billion. That decline is mainly attributable to its largest holding, which is in Icahn’s own company Icahn Enterprises LP (NASDAQ:IEP), whose stock has declined by over 13% since the beginning of the year. Its second-largest position, American International Group Inc (NYSE:AIG) has also slumped by 5.3%. On the other hand, Cheniere Energy, Inc. (NYSEMKT:LNG), Icahn Capital’s third-largest holding has advanced by over 19% since the beginning of January.
In this article, we are going to take a closer look at some of billionaire activist Carl Icahn’s stock picks as well as some companies in which Icahn Capital has closed its positions, based on its latest 13F filing, released yesterday. More specifically, we’ll discuss Paypal Holdings Inc (NASDAQ:PYPL), in which the fund reduced its stake during the first-quarter, Herbalife Ltd. (NYSE:HLF) and Navistar International Corp (NYSE:NAV), in which Icahn Capital raised its position, as well as Conduent Inc (NYSE:CNDT), which is a new addition to the fund’s portfolio. We’ll also take a closer look at Nuance Communications Inc. (NASDAQ:NUAN), in which the fund closed its stake, after having owned shares for around four years. It’s also worth mentioning that Icahn Capital sold all of its shares of Allergan plc Ordinary Shares (NYSE:AGN), which it had held since the second-quarter of 2016, in addition to reporting the closure of its position in Federal-Mogul Holdings Corp, which reflected the company’s takeover by Icahn Enterprises.
