Carl Icahn’s 13F Report Tracking – Q2 2024 Update (NASDAQ:IEP)

This article is part of a series providing an ongoing analysis of changes to Carl Icahn’s 13F portfolio on a quarterly basis. It is based on the regulatory Form 13F filed by Icahn on 14.08.2024. Please visit us Follow-up to Carl Icahn’s Portfolio series to get an idea of ​​his investment philosophy and ours previous update for fund movements in Q1 2024.

The number of holdings in the 13F filing remained flat at 14. The top five holdings in the filing are Icahn Enterprises, CVR Energy, Southwest Gas Holdings, International Flavors & Fragrances and CVR Partners LP.

Carl Icahn is best known for building sizable stakes in businesses and then pushing for changes to increase shareholder value. To learn more about his investment style and philosophy, check out “King Icahn: The Biography of a Renegade Capitalist.”

Note: Icahn’s 13F cannot be considered a listing of his holdings. Carl Icahn is the majority owner of Icahn Enterprises (NASDAQ:IEP) which owns several of the enterprises, and the entities in turn own the IEP. His 13F is a consolidated report. IEP Investor presentation (Slide 5) contains details of the business structure.

New stakes:

Caesars Entertainment (CZR): CZR is a 0.89% position of the portfolio purchased this quarter at prices between $31.85 and $43.98 and the stock is currently trading at $37.09.

Note: It was reported in May that Ichan had settled on a stake in Caesars Entertainment – ​​he has no plans for activism this time around. Since early 2019, he has been involved in activism at Caesars. Details follow: They acquired ~66 million shares of Caesars Entertainment (~10% of the business) in early 2019. This included ~5.8 million shares in convertible bonds. Total expenses were $646 million for a cost basis of $9.78 per share. The position has since been increased to ~120 million shares of beneficial ownership (17.55% of the business, mostly through stock swaps and convertible bonds). Icahn pushed for a sale of the company, and in April Anthony Rodio, who previously ran Icahn’s Tropicana Entertainment, was named CEO in a deal with the company. In June, Eldorado Resorts (ERI) agreed to buy the company in a cash and stock deal ($8.40 in cash and 0.0899 ERI shares for each share of old CZR held). The transaction closed in July 2020 and the combined business took the name “Caesars Entertainment”. Icahn left the position shortly after.

Belts Holdings (CTRI): CTRI’s small stake of 0.47% was set at $21 per share this quarter. CTRI is a carve-out from Southwest Gas that began trading in April. Icahn acquired the shares in a simultaneous private placement that closed immediately after the IPO. Shares started trading at ~$24 and are currently well below that price at $16.56.

Note: Southwest Gas has a six-month lock on their stake that expires in October.

Stake Removal:

Occidental Petroleum (OXY): The ~6% portfolio position was established in Q3 2020 when 19.3 million warrants (strike 22, 8/3/2027 expire) were purchased for ~$2.75 per warrant. The stock sold ~20% in Q3 2021. There were minor increases in the five quarters through Q1 2023. The sale this quarter was priced between ~$37 and ~$47. The warrant is currently trading at $31.74.

Note: They also had a large position in OXY common stock, but that was sold in Q1 2022.

Conduent Inc. (CNDT): The small ~1% stake in the portfolio came as a result of Conduent’s spinoff from Xerox, which closed in January 2017. The terms called for Xerox shareholders to receive 1:5 Conduent shares. Icahn owned 99 million Xerox shares for which he received 19.8 million Conduent shares. CNDT started trading at ~$15 and is currently trading at $3.75. Q2 2019 saw a ~60% increase in the stake to around $9 per share. This was followed by a ~20% increase in Q4 2019 to ~$6.50 per share. Discharge this quarter was $3.47 per share.

Note: Their stake in Conduent was about 18% of the business last quarter.

Stake Increases:

Icahn Enterprises (IEP): The IEP position has seen consistent growth over the years. Position size increased from ~98 million shares to ~102 million shares in 2013, to ~109 million shares in 2014, to ~117 million shares in 2015, to ~130 million shares in 2016, to ~158 million shares in 2017, 175.4 million shares in 29018 million 2019, 222 million shares in 2020, 257 million shares in 2021, 300 million shares in 2022 and 406 million of shares starting in Q2 2024. The stock is currently trading at $11.15. This compares to $8.89 per share in Q2 2024.

Note 1: Quarter-end regulatory filings show they own 406 million shares (86.15% of the business).

Note 2: In May 2023, IEP’s share price fell sharply following a short report by Hindenburg Research.

Note 3: The increase in stake over the years is primarily due to the fact that they considered dividends in additional shares rather than cash. The dividend was cut by 50% to $1 per unit in August 2023.

Constantly maintained:

CVR Energy Inc. (CVI): CVI is one of the top three 16.47% of the 13F portfolio position first acquired in Q4 2011. Most of the current position (66.69 million shares: ~66% of the entire business) was acquired through an offering of $30 per share in Q1 2012. Q3 2023 saw a discount of ~6% to an average price of ~$35.20 per share. The stock is currently trading at $22.72.

Note 1: Two MLPs have been established since the 2012 auction: CVR Refining the refining side and CVR Partners (UAN) the nitrogen fertilizer unit. CVR Energy held a majority stake in both. In August 2015, CVR Partners agreed to merge with Rentech Nitrogen. Q2 2018 saw a tender offer whereby new CVR Energy shares were exchanged for CVRR at a valuation of $24.26 per common unit (0.6335 CVI shares for one CVRR). ~22 million new shares were issued.

Note 2: Their implied cost basis of ~$30 is way overvalued due to discounts and special dividends paid over the years.

Southwest Gas Holdings (SWX): SWX is a ~7% portfolio position established in the two quarters through Q3 2021 at prices between ~$63 and ~$72. There was a ~75% stake increase in Q3 2022 via a tender offer at $82.50 per share. This was followed by a further increase of ~60% in Q1 2023 to prices between ~$59 and ~$67. The stock is currently trading at $70.11. There was a minor growth of ~3% in share in Q2 2023 and growth of ~2% in the following quarter.

Note 1: They have ~15% ownership in the business.

Note 2: The position was made public in an October 2022 regulatory filing when they said they opposed Southwest’s acquisition of Questar Pipeline, the transportation and storage business of Dominion Energy ( D ).

International Flavors and Fragrances (IFF): IFF now represents 3.29% of the portfolio share. A small position was established in Q1 2022 at prices between ~$116 and ~$150. In the last quarter, the stake was built at prices between ~$78 and ~$86. The stock is currently trading at ~$103.

CVR Partners LP (UAN): CVR Energy owns approximately 37% stake in CVR Partners and is listed separately in the 13F report starting Q1 2024. UAN is currently trading at $67.43.

Bausch Health (BHC): The 2.23% position in the BHC portfolio was purchased in Q4 2020 at prices between ~$15.30 and ~$21 and increased by ~575% in the following quarter at prices between ~$21.25 and ~34.40 USD. Shares are currently trading at $6.19.

Note: I own 34.7 million shares (~10% of the business). Two Icahn nominees are on the board.

Dana Inc. (DAN): DAN’s 1.60% stake was set in Q4 2020 at prices between ~$13.25 and ~$20 and increased ~200% in the following quarter at prices between ~$19 and ~$27. Q3 2021 also saw a ~20% increase in stake at prices between $20.90 and $24.60. The stock is currently trading at $10.46.

Note: Icahn controls ~10% of Dana Inc.

JetBlue Airways (JBLU): The 1.10% stake in JBLU’s portfolio was priced between ~$4.70 and ~$7.45 last quarter. The stock is currently trading at $5.39.

Note: Including forward contracts, they have a stake of about 10% in JBLU.

American Electric Power (AEP): AEP is a small 0.98% stock set in Q4 2023 at ~$71 to ~$84, and the stock is currently trading at ~$103.

SandRidge Energy (SD): SD represents 0.57% of the portfolio activist stake set in Q4 2017 at prices between $16 and $21, and the stock is now at $12.39.

Note: Icahn owns about a 13.5% stake in the business. He lobbied the board and was able to close the Bonanza Creek acquisition on December 28, 2017. In June 2018, Icahn won control of Sandridge’s board by winning a proxy battle.

Bausch + Lomb Corp (BLCO): BLCO is a spin-off from Bausch Health that started trading in May 2022 at ~$18 per share. The stock is currently trading at $15.89. In June 2022, two nominees of Icahn joined the board.

Illumina Inc. (ILMN): ILMN is a small 0.41% portfolio share set in Q1 2023 at prices between ~$194 and ~$233, and the stock is currently trading at ~$130.

Note: Icahn also owns ~90% of Viskase Companies (OTCPK:VKSC). It is also known to have a position in Fannie/Freddie (OTCQB:FNMA) (OTCQB:FMCC).

The spreadsheet below highlights the changes to Icahn’s 13F shares in Q2 2024:

Source: John Vincent. Data constructed from Carl Icahn’s 13F filings for Q1 2024 and Q2 2024.

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