NEW YORK (TheStreet) -- It may be time to invest with Carl Icahn, says Barron's: "Units of his company have been hammered lately. The units are down 16% this year to $90.76 including a 10-point decline in the past week. The units had peaked at nearly $150 in December."
The publication notes that "the best way to value the company is through what Icahn Enterprises calls its "indicative net asset value," which is based on the value of its investments -- including estimates for some illiquid holdings--less debt. The indicative NAV stood at about $78 per unit at year-end 2013 and could have risen to around $80 by the end of February, based on comments by company executives on an earnings conference call last month."
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Barron's estimates that the NAV now is below $80 based on the recent market selloff that has depressed notable Icahn investments like Federal-Mogul (FDML) , Apple (AAPL) - Get Report, and Herbalife (HLF) - Get Report.
"This suggests," the publication continues,"that the units now trade at about a 10% premium to estimated NAV. While the units have sometimes in the past traded at a discount to NAV, the current premium looks reasonable given the 78-year-old Icahn's success as an investor."
"With Icahn controlling nearly 90% of the 117 million outstanding units," Barron's points out, "there is virtually no Wall Street coverage of the company. The company's market is around $10 billion -- it also has about $4 billion of debt."
TheStreet Ratings team rates ICAHN ENTERPRISES LP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ICAHN ENTERPRISES LP (IEP) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, attractive valuation levels, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- IEP's revenue growth has slightly outpaced the industry average of 12.5%. Since the same quarter one year prior, revenues rose by 15.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 3066.66% and other important driving factors, this stock has surged by 48.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IEP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 3600.0% when compared to the same quarter one year prior, rising from $6.00 million to $222.00 million.
- Net operating cash flow has significantly increased by 176.02% to $403.00 million when compared to the same quarter last year. In addition, ICAHN ENTERPRISES LP has also vastly surpassed the industry average cash flow growth rate of 4.87%.
- You can view the full analysis from the report here: IEP Ratings Report