Carl Ichan is one of the most famous investors in the world. Carl Ichan made his fortune by investing in the stock market & currently worth $5.7 billion. What Ichan likes to do with his investing is purchase very cheap businesses that the market hasn’t shown much love to. Then he likes to turn around these businesses, get completely new management & board of directors & revamp the business.
Carl Ichan is all about getting good value for the price paid. Let us see what are his top holdings in his portfolio. Currently, he manages a $11 billion stock portfolio which includes 14 public trading stocks & 88% of his portfolio is in the first 5 stocks. One day we also can build such a stock portfolio & we have to work day by day for it.
Stock 1: Ichan Enterprises – IEP
85% of Ichan Enterprises is owned by Carl Ichan. Those who do buy into this stock are going to be well-diversified. Because Ichan Enterprises engages & invests in a lot of sectors like automotive, energy, metals, food packaging, mining, real estate & home fashion.
The other nice thing about this company is the dividend. For the last decade, they paid around 10% dividend yield. It has a massive dividend yield compared to other companies. 58% of his stock portfolio is in this one holding company.
Stock 2: CVR Energy – CVI
His 2nd largest position is CVR Energy which comes in at 18.5% of his portfolio. CVR Energy is a petroleum refining company. Petroleum refining is simply the process of transforming crude oil into useful products such as liquefied petroleum gas LPG gasoline or petrol which we use in our day-to-day lives.
CVR Energy has a capacity of processing 115,000 barrels per day. The beautiful thing about oil refinery businesses is that they often produce a lot of cash flow. In 2023 they produced $686 million in free cash flow just that single year. When we consider its market cap of $3.5 billion free cash flow is a good number.
The problem with this business is that the earnings in cash flow can be very volatile & rely on a lot of different factors including the price of oil. It is somewhat risky. But it produces a lot of cash it does pay a healthy dividend of 5.71% which is good in this market.
Stock 3: Southwest Gas Holdings – SWX
Ichan’s 3rd largest position is a company called Southwest Gas Holdings. Southwest Gas Holdings provides natural gas service to over 2 million residential, commercial & industrial customers in parts of Arizona, Nevada & California. The company was founded in 1931 after several decades it has spread its dominance over many areas. The company is the largest distributor of natural gas in Arizona & Nevada.
The share trade under the SWX ticket symbol currently trades at $73 a share of 35 PE multiples. Somewhat big number. The company pays a $2.48 dividend per share with a dividend yield of 3.3%. 6.4% of Carl Icahn’s portfolio is in this stock.
Stock 4: Occidental Petroleum – OXY
Occidental Petroleum Corporation is an American company engaged in hydrocarbon exploration in the United States & the Middle East. They manufacture petrochemicals in the United States, Canada & Chile. In Icahn’s portfolio, 6% is in OXY. In 2022 they generated total revenue of $36 billion & $12 billion in net profit. OXY share currently trades with double-digit multiples which is 17.68 & pays a 1.28% dividend yield.
Stock 5: Bausch Health – BHC
Bausch Health is an American-Canadian multinational specialty pharmaceutical company. They manufacture pharmaceutical products & branded generic drugs for skin diseases, gastrointestinal disorders, eye health & neurology.
The problem with this company is that from 2020 to now they have shown a net loss in their income statement. In 2023 they showed a $592 million loss alone. This is not a good sign for an investor. In the balance sheet, they show a negative figure in equity. That means the company is owed more debt than what the company holds as assets. Such companies can file a bankruptcy at any moment.
