10 Stocks Carl Icahn Loves for 2015: Apple, eBay, Hertz and More

 

NEW YORK (Stockpickr) -- At Stockpickr, we track the top holdings of a variety of high-profile investors, such as Warren Buffett and George Soros.

One of our most popular professional portfolios is that of Carl Icahn's Icahn Capital. Today, we're taking a closer look at Icahn's top 10 holdings as of the most recently reported quarter ended Sept. 30.

10. Hologic

Hologic (HOLX) comprises 2.5% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 34.2 million-share position from the previous quarter.

TheStreet Ratings team rates Hologic as a buy with a ratings score of B-. TheStreet Ratings team has this to say about its recommendation:

"We rate Hologic (HOLX) 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and expanding profit margins. 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:

  • Hologic reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Hologic turned its bottom line around by earning $0.06 versus -$4.33 in the prior year. This year, the market expects an improvement in earnings ($1.53 versus $0.06).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 102.5% when compared to the same quarter one year prior, rising from -$1,113.90 million to $28.10 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 6.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 68.85% to $131.70 million when compared to the same quarter last year. In addition, Hologic has also vastly surpassed the industry average cash flow growth rate of 1.22%.
  • The gross profit margin for Hologic is rather high; currently it is at 65.11%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HOLX's net profit margin of 4.25% significantly trails the industry average.

You can view the full analysis from the report here: HOLX Ratings Report

9. American Railcar Industries

American Railcar Industries (ARII) comprises 2.6% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 11.9 million-share position from the previous quarter.

TheStreet Ratings team rates American Railcar Industries as a buy with a ratings score of B. TheStreet Ratings team has this to say about its recommendation:

"We rate American Railcar Industries (ARII) a buy. This is driven by some important positives, 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 increase in stock price during the past year, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • American Railcar Industries has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, American Railcar Industries increased its bottom line by earning $4.07 versus $2.99 in the prior year. This year, the market expects an improvement in earnings ($4.76 versus $4.07).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Machinery industry average. The net income increased by 13.6% when compared to the same quarter one year prior, going from $20.97 million to $23.82 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.

You can view the full analysis from the report here: ARII Ratings Report

8. Nuance Communications

Nuance Communications (NUAN) comprises 2.8% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 60.8 million-share position from the previous quarter.

TheStreet Ratings team rates Nuance Communications as a hold with a ratings score of C-. TheStreet Ratings team has this to say about its recommendation:

"We rate Nuance Communications (NUAN) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 95.5% when compared to the same quarter one year prior, rising from -$32.32 million to -$1.46 million.
  • NUAN's revenue growth trails the industry average of 26.6%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $95.93 million or 2.60% when compared to the same quarter last year. Despite an increase in cash flow, Nuance Communications' average is still marginally south of the industry average growth rate of 11.33%.
  • NUAN has underperformed the S&P 500 Index, declining 12.94% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, Nuance Communications' return on equity significantly trails that of both the industry average and the S&P 500.

You can view the full analysis from the report here: NUAN Ratings Report

7. Hertz Global Holdings

Hertz Global Holdings (HTZ) comprises 2.9% of Icahn's portfolio as of Sept. 30. The 38.8 million-share position was a new buy in the most recently reported quarter.

TheStreet Ratings team rates Hertz Global Holdings as a buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate Hertz Global Holdings (HTZ) a buy. This is driven by some important positives, 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 compelling growth in net income, revenue growth, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 98.4% when compared to the same quarter one year prior, rising from -$36.80 million to -$0.60 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $738.00 million or 25.50% when compared to the same quarter last year. In addition, Hertz Global Holdings has also modestly surpassed the industry average cash flow growth rate of 22.69%.
  • Hertz Global Holdings reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, Hertz Global Holdings increased its bottom line by earning $0.76 versus $0.54 in the prior year. For the next year, the market is expecting a contraction of 10.5% in earnings ($0.68 versus $0.76).
  • 48.04% is the gross profit margin for Hertz Global Holdings which we consider to be strong. Regardless of HTZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HTZ's net profit margin of -0.02% significantly underperformed when compared to the industry average.

You can view the full analysis from the report here: HTZ Ratings Report

6. Chesapeake Energy

Chesapeake Energy (CHK) comprises 4.5% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 66.5 million-share position from the previous quarter.

TheStreet Ratings team rates Chesapeake Energy as a hold with a ratings score of C+. TheStreet Ratings team has this to say about its recommendation:

"We rate Chesapeake Energy (CHK) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 17.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Chesapeake Energy has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, Chesapeake Energy turned its bottom line around by earning $0.68 versus -$1.62 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $0.68).
  • The debt-to-equity ratio is somewhat low, currently at 0.71, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • CHK has underperformed the S&P 500 Index, declining 23.88% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has decreased to $1,162.00 million or 14.30% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

You can view the full analysis from the report here: CHK Ratings Report

5. Federal-Mogul Holdings

Federal-Mogul Holdings (FDML) comprises 5.4% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 121.1 million-share position from the previous quarter.

TheStreet Ratings team rates Federal-Mogul Holdings as a hold with a ratings score of C. TheStreet Ratings team has this to say about its recommendation:

"We rate Federal-Mogul Holdings (FDML) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FDML's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Federal-Mogul Holdings has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Federal-Mogul Holdings turned its bottom line around by earning $0.89 versus -$0.99 in the prior year. For the next year, the market is expecting a contraction of 0.6% in earnings ($0.89 versus $0.89).
  • Currently the debt-to-equity ratio of 1.89 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, FDML's quick ratio is somewhat strong at 1.03, demonstrating the ability to handle short-term liquidity needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Auto Components industry. The net income has significantly decreased by 147.4% when compared to the same quarter one year ago, falling from $38.00 million to -$18.00 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.51%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.14% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FDML is still more expensive than most of the other companies in its industry.

You can view the full analysis from the report here: FDML Ratings Report

4. eBay

eBay (EBAY) comprises 7.7% of Icahn's portfolio as of the most recently reported quarter. Icahn increased his position in eBay by 48.8% from the previous quarter to 45.8 million shares.

TheStreet Ratings team rates eBay as a buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate eBay (EBAY) a buy. This is driven by some important positives, 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 revenue growth, growth in earnings per share, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • eBay's revenue growth trails the industry average of 28.8%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • eBay's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, eBay increased its bottom line by earning $2.18 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.18).
  • Net operating cash flow has slightly increased to $1,368.00 million or 2.54% when compared to the same quarter last year. Despite an increase in cash flow, eBay's cash flow growth rate is still lower than the industry average growth rate of 26.48%.
  • The gross profit margin for eBay is currently very high, coming in at 75.14%. Regardless of eBay's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.46% trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.47 is sturdy.

You can view the full analysis from the report here: EBAY Ratings Report

3. CVR Energy

CVR Energy (CVI) comprises 9.5% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 71.2 million-share position from the previous quarter.

TheStreet Ratings team rates CVR Energy as a hold with a ratings score of C+. TheStreet Ratings team has this to say about its recommendation:

"We rate CVR Energy (CVI) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 15.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CVI has a quick ratio of 1.79, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 82.0% when compared to the same quarter one year ago, falling from $44.00 million to $7.90 million.
  • The gross profit margin for CVR Energy is currently extremely low, coming in at 3.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.34% trails that of the industry average.

You can view the full analysis from the report here: CVI Ratings Report

2. Apple

Apple (AAPL) comprises 15.8% of Icahn's portfolio as of the most recently reported quarter. Icahn maintained his 52.8 million-share position from the previous quarter.

TheStreet Ratings team rates Apple as a buy with a ratings score of A+. TheStreet Ratings team has this to say about its recommendation:

"We rate Apple (AAPL) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.16% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAPL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Apple has improved earnings per share by 20.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Apple increased its bottom line by earning $6.43 versus $5.66 in the prior year. This year, the market expects an improvement in earnings ($7.78 versus $6.43).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.5%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Computers & Peripherals industry and the overall market, Apple's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 42.68% is the gross profit margin for Apple which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.10% is above that of the industry average.

You can view the full analysis from the report here: AAPL Ratings Report

1. Icahn Enterprises

Icahn Enterprises (IEP) comprises 33.7% of Icahn's portfolio as of the most recently reported quarter. Icahn increased his position in Icahn Enterprises by 1.3% from the previous quarter to 107.2 million shares.

TheStreet Ratings team rates Icahn Enterprises as a hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate Icahn Enterprises (IEP) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 282.50% to $219.00 million when compared to the same quarter last year. In addition, Icahn Enterprises has also vastly surpassed the industry average cash flow growth rate of 21.97%.
  • IEP, with its decline in revenue, underperformed when compared the industry average of 1.2%. Since the same quarter one year prior, revenues fell by 23.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Icahn Enterprises has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Icahn Enterprises increased its bottom line by earning $8.98 versus $3.72 in the prior year. For the next year, the market is expecting a contraction of 92.9% in earnings ($0.64 versus $8.98).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Industrial Conglomerates industry and the overall market, Icahn Enterprises' return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for Icahn Enterprises is currently extremely low, coming in at 4.46%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -8.11% is significantly below that of the industry average.

You can view the full analysis from the report here: IEP Ratings Report

To see these stocks and other Icahn Capital holdings in action, check out Carl Icahn's portfolio on Stockpickr.

Stockpickr is a wholly owned subsidiary of TheStreet.com.

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