Yesterday activist investor Carl Icahn reported a large buy into Talisman Energy (TLM), as reported by GuruFocus Real Time Picks. The always vocal investor picked up a total of 61,554,602 shares of the company’s stock. Icahn announced on Monday via Twitter that he had built up a nearly 6% stake in Talisman Energy, representing an approximately $300 million investment.
The tweet featured below reports that bought approximately 61 million shares and that meetings with the company’s management could be in the near future.
According to the SEC report, Icahn began to purchase these shares on Sept. 25 and since then has built up a 5.97% stake in the company.
Talisman Energy is a Canadian-based oil and gas producing company. Its primary businesses are exploration, development, production, transportation and marketing of crude oil, natural gas and natural gas liquids.
Talisman Energy’s historical revenue and net income:
Icahn has had a busy year thus far. The guru lost the fight for Dell (DELL) to the computer company’s CEO Michael Dell, and even more recently Icahn announced his new position in Apple (AAPL) and his pursuit to get CEO Tim Cook to award a $150 billion buyback. Icahn has also seen great success in Netflix and has become one of the largest shareholders of Herbalife.
According to Forbes, Icahn has bought into a company with a market cap “under $15 billion, with falling revenues and earnings, and a decently sized $5.2 billion debt load.”
The company has been struggling as of late and could use Icahn’s influence and direction. President and CEO Hal Kvisle has made several noble attempts at financially restructuring the company, but so far they have not really made any noticeable positive impact towards the company.
So far in his attempts, Kvisle has sold down Talisman’s interests in oil and gas plays in Canada as well as in the North Sea. This generated $3 billion which then went to help the company’s capital spending habit, and has ultimately outstripped the company’s free cash flow from operations. Kvisle has also attempted to spend more carefully by focusing on projects with faster cycle times.
Christopher Helman of Forbes reports that the problem with his strategies thus far is that “turning a big company around takes time, but investors are impatient,” and they get even more impatient when the company’s earnings are not up to par.
The CEO told the Globe & Mail: “I have two objectives here: One is to revamp the company, to reset the strategy, to adjust the cost structure, to get everything going in the right direction. The second objective I have is to assist in getting a new CEO in place. Then I’m out.”
The analysis on Talisman reports that the company’s revenue has been in decline, its dividend yield is at a one-year low, it’s had an operating loss over the past three years and its P/E ratio is at a 10-year high.
Talisman Energy has a market cap of $12.7 billion. Its shares are currently trading at around $12.27 with a P/E ratio of 95.30, a P/S ratio of 2.00 and a P/B ratio of 1.30. The company’s dividend yield is currently at 2.20%. Talisman had an annual average earnings growth of 0.8% over the past ten years.
Check out all of Carl Icahn’s real time picks here.