This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Carl Icahn Bets Big on 23 Stocks

Stocks in this article: NAVAMLNCHKCMCENZNHAINLWSNMSI

BOSTON ( TheStreet) -- Activist-investor Carl Icahn, founder of Icahn Capital, held a concentrated equity portfolio of only 23 stocks at fourth-quarter's end. Icahn's bets on pharmaceutical and biotechnology companies are heavy. Here's a snapshot of the seven companies in which the famed investor amplified his stake.

Amylin (AMLN), +1.4 million shares
Chesapeake Energy (CHK), +4.2 million shares
Commercial Metals (CMC), +1.2 million shares
Enzon (ENZN), +1.9 million shares
Hain Celestial (HAIN), +311 thousand shares
Lawson Software (LWSN), +422 thousand shares
Motorola Solutions (MSI), +2.0 million shares

Icahn added one new position, Navistar International (NAV), to his portfolio, purchasing 9,326 shares. Navistar makes commercial trucks, buses, diesel engines, military vehicles and chassis. Its stock has soared 65% in the past 12 months.

>>> View Carl Icahn's Portfolio

Other hedge funds that own sizable stakes of Navistar include Owl Creek Asset Management, D.E. Shaw and Appaloosa Management.

Navistar's adjusted fiscal fourth-quarter earnings fell 66% to 61 cents, beating analysts' consensus estimate by 3.7%. Revenue, at $3.4 billion, exceeded the consensus by 3.9%. Navistar's quarterly gross margin narrowed from 23% to 20% and its operating margin contracted from 6.2% to 4.3%. The cash balance declined modestly to $1.2 billion, converting to a quick ratio of 1.1, and total debt decreased by 10% to $4.9 billion. However, Navistar is running a shareholders' deficit of $973 million. That figure has decreased 46% in 12 months as profitability resumed. The company will disclose fiscal first-quarter results in March.

During the latest quarter, performance was hampered by ratification of a new United Auto Workers contract, which entailed $10 million of one-time separation and layoff costs, but which should assist Navistar in achieving a cost-effective operating structure going forward. The trucking segment's sales multiplied from $5 million to $86 million, an encouraging sign since the trucking market has been in a three-year trough, according to management. The company also booked sizable orders in its military segment for mine-resistant and armored vehicles.

Navistar, which has a market value of $4.7 billion, is a cyclically-dependent company. It has a beta value of 1.2, tending to magnify market movements. Of analysts covering Navistar, 12, or 67%, advocate purchasing its stock, four say to hold and two recommend selling it. The stock has a median target of $72.60. Here is a closer look at sell-side ratings and targets:

Sterne, Agee & Leach, Buy, $96
Jefferies, Buy, $75
Goldman Sachs, Neutral, $71
Deutsche Bank, Buy, $71
JPMorgan, Underweight, $66

Here is a snapshot of the stock's valuation:

Forward Earnings Multiple: 8.9 (52% Industry Discount)
Trailing Earnings Multiple: 22 (19% Industry Discount)
Cash Flow Multiple: 4.3 (74% Industry Discount)
Sales Multiple: 0.4 (76% Industry Discount)
PEG Ratio: 0.3 (70% Growth Discount)

-- Written by Jake Lynch in Boston.

RELATED STORIES:

Become a fan of TheStreet on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,794.73 +116.83 0.70%
S&P 500 1,962.42 +11.60 0.59%
NASDAQ 4,473.0590 +20.2670 0.46%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs