In light of U.S. crude oil prices hitting a new year-to-date high, five energy holdings in Carl Icahn (Trades, Portfolio)’s equity portfolio with high returns are Occidental Petroleum Corp. (OXY, Financial), Cheniere Energy Inc. (LNG, Financial), CVR Energy Inc. (CVI, Financial), Delek US Holdings Inc. (DK, Financial) and SandRidge Energy Inc. (SD, Financial).
Oil prices touch new year-to-date high
On Monday, West Texas Intermediate crude oil prices hit an intraday high of $82 before falling down to around $81. Despite this, crude oil prices have hit a new year-to-date high since trading at around $47 on Jan. 4.
Guru background and portfolio summary
Icahn takes an activist approach to investing: The guru unlocks shareholder value by investing majority stakes in out-of-favor companies and pushes for changes.
As of the second-quarter portfolio filing, Icahn’s $24.29 billion equity portfolio contains an 18.13% weight in energy, second only to a 59.99% equity portfolio weight in industrials.
Figure 1 illustrates a map showing the year-to-date return of Icahn’s five energy holdings as of Monday.
Figure 1
Occidental Petroleum
Icahn owns 49,125,346 shares of Occidental Petroleum (OXY, Financial), giving the position 6.32% weight in the equity portfolio.
Shares traded around $33.43, showing the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.87. The stock has gained approximately 94.45% year to date.
GuruFocus ranks the Houston-based company’s financial strength 3 out of 10 on several warning signs, which include a weak Altman Z-score of 0.49 and interest coverage and debt ratios that underperform more than 85% of global competitors.
Other gurus with holdings in Occidental Petroleum include Dodge & Cox and David Tepper (Trades, Portfolio).
Cheniere Energy
Icahn owns 16,168,606 shares of Cheniere Energy (LNG, Financial), giving the position 5.77% equity portfolio weight.
Shares traded around $101.98, showing the stock is modestly overvalued based on Monday’s price-to-GF Value ratio of 1.20. The stock has gained approximately 66.03% year to date.
GuruFocus ranks the Houston-based company’s profitability 5 out of 10: Even though returns are underperforming more than half of global competitors, Cheniere Energy’s three-year revenue and earnings growth rates outperform more than 70% of global energy companies.
Other gurus with holdings in Cheniere Energy include Pioneer Investments and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
CVR Energy
Icahn owns 71,198,718 shares of CVR Energy (CVI, Financial), giving the position 5.26% equity portfolio space.
Shares traded around $19.84, showing that the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.75. The stock has gained approximately 41.01% year to date.
GuruFocus ranks the Sugar Land, Texas-based company’s financial strength 3 out of 10 on several warning signs, which include a weak Altman Z-score of 1.24 and interest coverage and debt ratios that underperform more than 90% of global competitors.
Delek US Holdings
Icahn owns 7,461,625 shares of Delek US Holdings (DK, Financial), giving the position 0.66% equity portfolio space.
Shares traded around $19.63, showing that the stock is significantly overvalued based on Monday’s price-to-GF Value ratio of 1.35. The stock has gained approximately 21.10% year to date.
GuruFocus ranks the Brentwood, Tennessee-based company’s financial strength 4 out of 10 on the back of a low Altman Z-score of 1.25 and debt ratios that are underperforming more than 90% of global competitors.
SandRidge Energy
Icahn owns 4,818,832 shares of SandRidge Energy (SD, Financial), giving the position 0.12% weight in the equity portfolio.
Shares traded around $12.66, showing the stock is significantly overvalued based on Monday’s price-to-GF Value ratio of 5.41. The stock has gained approximately 340.32% year to date.
GuruFocus ranks the Oklahoma City-based company’s financial strength 5 out of 10: The company has a high Piotroski F-score of 7 and debt ratios that outperform more than 70% of global competitors despite a low Altman Z-score.
