At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Icahn Enterprises LP (NASDAQ:IEP) makes for a good investment right now.
Is Icahn Enterprises LP (NASDAQ:IEP) an exceptional investment today? Hedge funds are in an optimistic mood. The number of bullish hedge fund bets inched up by 1 recently. Still, the increase in interest was not enough for the company to secure a spot on the list of 30 most popular stocks among hedge funds.
In today’s marketplace there are several metrics investors have at their disposal to value publicly traded companies. Some of the most under-the-radar metrics are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat the S&P 500 by a significant amount (see the details here).
While collecting data for our write-up, we tracked down the opinion of Horizon Kinetics LLC, a fund that is long on the stock. In its 4th Quarter Shareholder Letter, the fund said this:
“Icahn Enterprises(NYSE: IEP), which has a $9 billion market cap, is a primary investment vehicle of investor Carl Icahn, who owns approximately 90% of the depositary units. Through public and private investments, IEP is a highly diversified portfolio of businesses, which include the automotive sector, energy, hotels and gaming, railcar manufacturing and leasing, food packaging, metals, and real estate.
Mr. Icahn is an activist investor with a deep value opportunist’s bent. Recent transactions include the acquisition of all remaining outstanding shares of car parts manufacturer Federal-Mogul in late-2016, the shares of which he began accumulating when that sector was deeply depressed in 2001. Last year, IEP sold its subsidiary American Railcar Leasing LLC (ARL) to SMBC Rail Services, which is a subsidiary of Mitsui Banking Corp. The sale price was $2.78 billion; IEP booked a pre-tax gain of $1.5 billion on the sale. In addition, IEP quadrupled its investment in the Las Vegas casino formerly known as the Fountainbleu, which it acquired in 2010 for $150 million and divested in August 2017 for $600 million.”
We’re going to take a look at the new hedge fund action encompassing Icahn Enterprises LP (NASDAQ:IEP).
How have hedgies been trading Icahn Enterprises LP (NASDAQ:IEP)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IEP over the last 13 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in Icahn Enterprises LP (NASDAQ:IEP) was held by Icahn Capital LP, which reported holding $12078.5 million worth of stock at the end of September. It was followed by Horizon Asset Management with a $152.4 million position. Other investors bullish on the company included Citadel Investment Group, McKinley Capital Management, and Citadel Investment Group.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in Icahn Enterprises LP (NASDAQ:IEP). Citadel Investment Group had $1.4 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Icahn Enterprises L.P. (NASDAQ:IEP). Cadence Design Systems Inc (NASDAQ:CDNS), Expeditors International of Washington, Inc. (NASDAQ:EXPD), International Flavors & Fragrances Inc. (NYSE:IFF), and Elanco Animal Health Incorporated (NYSE:ELAN). This group of stocks’ market caps are similar to AAPL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDNS | 32 | 1309588 | 10 |
| EXPD | 22 | 709696 | -6 |
| IFF | 22 | 412418 | 1 |
| ELAN | 36 | 368441 | 36 |
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $700 million. That figure was $12234 million in IEP’s case. Elanco Animal Health Incorporated (NYSE:ELAN) is the most popular stock in this table. On the other hand, Expeditors International of Washington, Inc. (NASDAQ:EXPD) and International Flavors & Fragrances Inc. (NYSE:IFF) are the least popular ones with only 22 bullish hedge fund positions.
Disclosure: None. This article was originally published at Insider Monkey.
