When people think of Carl Icahn, they think: corporate raider, activist investor, hostile takeovers, proxy fights. The past year has seen headlines with Carl Icahn in battles with the boards and managements of Blockbuster ( BBI), Hollywood Entertainment ( HLYW) and Kerr-McGee ( KMG).But a recent 13F filing on Friday cast some light on his other, more passive holdings. It's interesting to see which companies he buys up where he's not an activist. Certainly the management teams of these companies have to wonder what he's up to, even if he hasn't said a word about his investments. Is he planting the seeds for his future takeover attempts? Is he going to wage a proxy fight and try to take over the board? What's interesting to me in a look at the broader scope of Icahn's picks is that it reads like a who's who of stocks that were in the news over the past year. While some investors like to find stocks that are out of the mainstream and maybe represent pockets of hidden value (Buffett is usually thought of in this category), Icahn seems to dive right into the headlines. It's almost like a magic trick. While companies get in the news through the firing and hiring of CEOs, Icahn tries to figure out what's going on with the hand hidden behind the back, where the profits are being generated. First off is Time Warner ( TWX), which is one of my favorite companies, and which has received sparse coverage thus far. Icahn owns 5 million shares, valued at about $88 million. Shares closed at $16.96 a share, and Time Warner is priced almost exactly where it was at the market bottom in July 2002, despite a complete management shakeup (including a renaming), and a successful restructuring of the cable and music lines. The stock has suffered from guilt by association with AOL, and the dot-com bubble/burst had its effect on the stock, as evidenced by the chart below, which shows Time Warner's comparably lagging performance over the past five years vs. several of its media peers: News Corp. ( NWS), Viacom ( VIA.B) and even troubled Disney ( DIS).
|Lagging Its Peers |
Dogged by AOL, Time Warner's five-year chart appreciably lags three peers.
|Source: Formula Capital, James Altucher|