"Tracking Carl Icahn’s Portfolio – Q2 2015 Update"
"Carl Icahn’s US long portfolio decreased from $32.05B to $31.20B this quarter.A stake in Cheniere Energy was established this quarter while eliminating Netflix.The huge Apple position is now at 21.21% of the 13F portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Carl Icahn’s US stock portfolio on a quarterly basis. It is based on Icahn’s regulatory  filed on 08/14/2015. Please visit our  to get an idea of his investment philosophy and our  highlighting the fund’s moves during Q1 2015.This quarter, Icahn’s US long portfolio decreased 2.65% from $32.05B to $31.20B. The number of holdings increased from 21 to 22. The portfolio is very concentrated with the largest five positions accounting for ~75% of the entire holdings: Icahn Enterprises (31.21%), Apple Inc. (21.21%), eBay Inc. (8.93%), CVR Energy Inc. (8.59%), and Federal Mogul Corporation (5.04%).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 investing style and philosophy check-out “”.Note: Icahn’s 13F filing is a consolidated report and so should not be viewed as a single portfolio. Specifically, Icahn Enterprises holds several of the businesses and the entities in turn hold Icahn Enterprises. For an idea on the business structure, check-out  (Slide 9) and the “Included Managers” list in the .Stake Disposals:Netflix Inc. (NFLX): NFLX was a 1.84% of the US long portfolio position as of last quarter. It was eliminated this quarter at prices between $59 and $97. The original stake was established in Q3 2012 at prices between $7.57 and $12.14. The position was increased by ~300% in Q4 2012 at a cost-basis of around $7. Over the last five quarters, the stake was sold down by ~75% at prices between $43 and $69. Icahn harvested large long-term gains from the position. The stock is now at $122 having vaulted ~150% YTD.Note 1: The prices quoted above are adjusted for the 7:1 stock-split last month.Note 2: The original 2012 stake in NFLX was an activist position but Icahn backed-off as the company started posting strong financial results.New Stakes:Cheniere Energy (LNG): LNG is a very small 0.24% of the US long portfolio stake established this quarter at prices between $68.49 and $79.78. The stock currently trades at $64.37.Note 1: An August 6, 2015 13D regulatory filing showed Icahn beneficially owning 19.35M shares (~8.2% of the business) at a cost-basis in the high-60s.Note 2: LNG has strong recent super-investor interest: Seth Klarman (Baupost Group) has a huge ~18% of the portfolio (~6.5% of the business) stake while John Griffin (Blue Ridge Capital) and Stephen Mandel (Lone Pine Capital) have also established significantly large stakes.Gannett Inc. (GCI) previously Gannett SpinCo: GCI is a very small 0.34% of the US long portfolio stake established this quarter as a result of  Gannett’s Tegna Inc. spin-off and rename transaction that closed in June. Icahn controls 6.51% of the business.Note: The publishing business (owns USA Today and 90+ local daily publications) was spun-off and named Gannett Inc. while the parent company was renamed Tegna Inc. The terms called for shareholders of the parent to receive shares of the spinoff in the ratio 1:2.Stake Decreases:None.Stake Increases:Icahn Enterprises (IEP): IEP is a very long-term position that has seen consistent buying over the years. In 2013, the position size increased from ~98M shares to ~102M shares and 2014 saw a further increase to ~109M shares. Last two quarters have also seen increases with the current share count at ~112M shares. The last big increase happened in 2012 when around 20M shares were purchased at prices between $36.50 and $42.50. The stock currently trades at $72.14.Kept Steady:Apple Inc. (AAPL): The stake in AAPL was established in mid-August 2013 at around $68 per share. The original position was increased by ~22% in Q4 2013 and the following quarter saw another ~60% increase at prices between $57 and $80. The stock currently trades at $115. Apple is the second largest position in the portfolio at 21.21%. Icahn is very bullish on Apple and recently said the fair-value is $240.CVR Energy Inc. (CVI): CVI is a huge 8.59% of the US long portfolio position first purchased in Q4 2011. The bulk of the current position (71.2M shares: 80% of the whole business) was purchased through a $30 per share tender offer in H1 2012. The stock currently trades at $42.06.Note: Two MLPs were carved out since the 2012 tender: CVR Refining (CVRR) the refining portion and CVR Partners (UAN) the nitrogen fertilizer unit. CVR Energy owns 71% of CVR Refining and 53% of CVR Partners. Earlier this month, CVR Partners agreed to merge with Rentech Nitrogen (RNF).CVR Refining LP (CVRR): CVRR is a small 0.35% of the US long portfolio position established in Q1 2013 as a result of the spin-off (carve-out) of CVR Refining from CVR Energy. The position was increased by 50% in Q2 2013 at prices between $28 and $35. The stock currently trades well below that range at $20.02.Chesapeake Energy (CHK): CHK was first purchased in 2010 but was quickly sold. The bulk of the current stake was purchased in Q2 2012 at prices between $14.50 and $23. Last quarter saw a ~10% increase at prices between $13.50 and $21.26. The stock currently trades well below those ranges at $7.34. The ownership stake in Chesapeake is at ~11% (~73M shares).Note 1: Icahn successfully engaged in a proxy fight alongside Southeastern Asset Management that led to the eventual departure of the CEO.Note 2: The implied performance of this stake by the prices quoted above is negatively skewed because of the spinoff of Seventy Seven Energy (SSE), its Oilfield Services business unit. The terms of the deal called for CHK shareholders to receive one share of SSE for every 14 shares of CHK held.Ebay Inc. (EBAY): EBAY is a large (top-three) 8.93% of the US long portfolio position (~3.8% of the business) established in Q1 2014 at prices between $20 and $23. The position was increased by ~11% in Q2 2014 at prices between $19 and $22 and by ~49% the following quarter at prices between $19.50 and $22.25. The stock currently trades at $27.43.Note 1: EBAY spun-off its PayPal (PYPL) subsidiary last month and the prices quoted above are adjusted for that spin-off.Note 2: The stake was first disclosed in eBay’s FY 2013 earnings release when it was also revealed that Carl Icahn proposed spinning off PayPal and nominated two board members. In April 2014, an agreement was reached that prevented an immediate proxy fight and in September 2014, eBay announced plans to spinoff PayPal into a separate publicly traded company.Federal Mogul (FDML): FDML is a very long-term stake first purchased in 2000. It went through an asbestos-claim related bankruptcy and emerged in 2007 with Icahn owning over 75% of the outstanding shares, as debt he owned got converted into equity. In Q3 2013, his share count increased by ~58% (over 44M shares) - the new shares were purchased by exercising FDML’s rights offering (In May, Federal-Mogul launched a $500 million rights offering whereby shareholders could purchase an additional share for each one they currently held) at $9.78 per share - Icahn got 44M of the 51M shares purchased in the offering. The stock currently trades at around $9.36. Last quarter saw a ~14% increase at prices between $12.61 and $16.09. Icahn controls ~82% of the business. It is Icahn’s fifth-largest position at 5.04% of the US long portfolio.Tegna Inc. (TGNA) previously Gannett: Icahn holds 14.97M shares (~6.6% of the business) of TGNA at a cost-basis of around $25. The original stake is from Q2 2014 with the bulk purchased the following quarter. The stock currently trades at $24.99 and the stake is at 1.54% of the US long portfolio.Note: The cost-basis quoted above is adjusted for the publishing business spinoff that closed in June. Tegna’s business has broadcasting and digital assets: they own 45+ television stations and digital businesses such as Cars.com, CareerBuilder, PointRoll, and Shoplocal.Herbalife (HLF): HLF is a 3% of the US long portfolio stake first purchased in Q1 2013 in the high-30s price range. The position was marginally increased in Q2 2013 to almost 17M shares. The stock currently trades at $58.28.Note: Bill Ackman is on the other side of this trade - short 20M shares since Q4 2012. Bill Ackman and Carl Icahn ended their feud in May 2014 and they have agreed to disagree on HLF. HLF is being investigated by the FTC (Civil Investigative Demand - CID).Hertz Global Holdings (HTZ): HTZ is a fairly large 3.02% of the US long portfolio position. It was established in Q3 2014 at a cost-basis of $28.35. In Q4 2014, the stake was increased by just over one-third at prices between $19.38 and $25.47. The stock currently trades at $18.89. Icahn owns 11.34% of the business. For investors attempting to follow Icahn, HTZ is a very good option to consider for further research.Hologic Incorporated (HOLX): HOLX is a 4.17% of the US long portfolio activist stake established in Q4 2013 at around $21 per share. Icahn currently has a 12.5% stake in the business. The stock currently trades at $42.21. HOLX has risen a stunning ~57% so far this year.Note: Icahn nominated two representatives to the board and in December 2013, a new CEO (Stephen MacMillan formerly of Stryker) was appointed stemming hopes that Icahn might immediately push for the sale of the business. But, later that month Stephen MacMillan confirmed that his focus will be on growing the business.Manitowoc Company (MTW): MTW is a small 0.66% of the portfolio activist stake. It was established in Q4 2014 at prices between $16.60 and $23.05 and increased by ~136% last quarter at prices between $17.69 and $22.83. The stock currently trades at $17.25. For investors attempting to follow Icahn, MTW is a good option to consider for further research.Note: Carl Icahn reached an agreement with Manitowoc in February whereby he got a board seat. Also, Manitowoc’s Cranes and Food Services businesses will be separated in a spinoff.Navistar International (NAV): NAV is a relatively small 1.18% of the US long portfolio position that was increased by ~12% in Q3 2013 at prices between $27.50 and $40. Q2 2014 saw a ~8% increase at prices between $31.93 and $38.35 and the following quarter saw a further ~14% increase at prices between $29.10 and $37.76. The stock currently trades well below the low-end of those ranges at $17.25. Icahn controls 19.99% of the business.Nuance Communications (NUAN): NUAN is a 2.72% of the US long portfolio stake established in Q1 2013 at prices between $18 and $25. The position was increased by roughly two-thirds in Q3 2013 at prices between $18.31 and $20. The stock currently trades below the low end of those ranges at $17.88. Icahn’s ownership is currently at over 17% of the company (~61M shares). For investors attempting to follow Icahn, Nuance is a very good option to consider for further research.Note: In response to activist pressure, Nuance adopted a poison-pill provision that allowed shareholders to purchase additional shares, if any one shareholder acquired more than 20% of the outstanding shares. On October 8, 2013 Nuance yielded somewhat by appointing two new Icahn recommended directors, thus avoiding a proxy fight.Seventy Seven Energy (SSE): SSE is a minutely small 0.07% of the US long portfolio position established in Q3 2014 as a result of the spin-off of SSE from Chesapeake Energy. Chesapeake Energy shareholders received one SSE share for 14 Chesapeake Energy shares held. Icahn’s stake is consistent with that ratio. The stock is currently at $2.60. Icahn controls 9.34% of the business and the stock is down a whopping ~90% since the spin-off.Transocean Ltd. (RIG): RIG is a small 1.11% of the US long portfolio stake first purchased in Q4 2012 at prices between $44.20 and $49.50. The position was increased by ~250% in Q1 2013 at prices between $44 and $60. The stock currently trades well below those ranges at $13.65.Voltari Corporation (VLTC): VLTC position was increased by ~600% last quarter to a 52.3% ownership stake. As a percentage of the portfolio, the position is still minutely small. The stake increase came about from Voltari’s rights offering in February: 95% of the issued shares were acquired by Icahn by making use of the oversubscription privilege at a cost-basis of $1.36. The stock currently trades at $7.89 having risen more than 5x in the last five months.Note: VLTC rights offering is another example of hedge funds exploiting inefficiencies in the mechanism. Per the terms of the offering, ordinary shareholders had oversubscription privilege at $0.97 but they overwhelmingly chose not to exercise even the basic right, let alone the oversubscription privilege. Basically, rights offerings involve investors having to put more money to keep their ownership interest at the same level - as new money is involved, most ordinary investors shy away from it leaving the door open for savvy investors to take advantage.American Railcar Inds. (ARII), Enzon Pharmaceuticals (ENZN), and Mentor Graphics (MENT): These are relatively small (less than 2% of the US long portfolio) positions that were held steady this quarter.  Although the stakes are small on a relative basis, the percentages owned of the businesses concerned are very significant. Icahn owns 55.60%, 13.7%, and 14.2% of ARII, ENZN, and MENT respectively.Note 1: The ARII stake will increase further if the company follows through on a $250M share repurchase program announced last month.Note 2: Icahn also owns significant stakes in the following OTC stocks as per latest 10Q: ~73% of Viskase Companies (VKSC) and ~68% of Tropicana Entertainment (TPCA). The TPCA stake is set to increase further, if Tropicana follows through on a $50M repurchase program announced earlier this month.The spreadsheet below highlights changes to Icahn’s US stock holdings in Q2 2015:13D/13G/A Updates: 8/19/2015 -13D - RNF - Rentech Nitrogen - 23.25M shares - 59.7% - merger with CVR Partners LP related filing, 8/17/2015 - 13D/A -  TPCA - Tropicana Entertainment - 17.86M shares - 67.89% - On August 6th, they announced a $50M repurchase program and the filing was to indicate that the ownership stake would increase in the future, 8/14/2015 - 13D/A -ARII - American Railcar - 11.87M shares - 55.60% - On July 29, 2015, ARII announced a $250M share repurchase program and the filing is to indicate that the ownership stake would increase in the future.13D/13G/A Updates: 8/7/2015 - 13D/A - VLTC - some note issue, 8/6/2015 - 13D - LNG - event date July 27, 2015 - 3.87M shares - 1.64% of business, 8/4/2015 - HOLX - 13D/A - 5.63M shares - 2% of business, 7/9/2015 - 13D - GCI - 1.5M shares - 1.3% of business, 7/9/2015 - 13D/A - TGNA - Tegna Inc. - spinoff from GCI and rename transaction - spunoff the publishing business as GCI and the remaining was renamed TGNA - related filing.13D/13G/A Updates: 5/8/2015 - TLM - 0, 3/31/2015 - VLTC - 4.74M - 52.3%, 3/27/2015 - FDML - 139M - 81.99%, 3/23/2015 - CHK - 73M shares - 10.98%, PREVIOUS: MTW - 10.58M shares compared to 4.5M in 13F, 7.81% - separation of cranes and food services businesses settlement agreement. GCI - two directors to the board, HTZ - 51.92M shares - 11.34% - same as 13F, Navistar - 16.27M shares - 19.99% - same as 13F."