According to current portfolio statistics, a Premium feature of GuruFocus, the top energy companies in Carl Icahn (Trades, Portfolio)’s fourth-quarter 2022 13F equity portfolio are Occidental Petroleum Corp. (OXY, Financial), CVR Energy Inc. (CVI, Financial), SandRidge Energy Inc. (SD, Financial) and Cheniere Energy Inc. (LNG, Financial).
Guru warns that the U.S. economy is in trouble
Icahn said earlier this week in a CNBC interview that “the system is breaking down” and there is “a major problem” in the U.S. economy. The activist guru said that corporate leadership is “worse than mediocre,” adding that activist investors are “successful” at pushing for corporate changes.
The Icahn Enterprises leader mentioned that surging interest rates are also a major problem. On Tuesday, the Bureau of Labor Statistics said the consumer price index increased 0.4% in February and 6% year over year, in line with consensus estimates. While the annual inflation rate is the slowest since September 2021, the high inflation rate may still prompt the Federal Reserve to raise interest rates. Icahn further said that if the Fed does not continue increasing interest rates, the problem of inflation may become harder to get out in the future.
Energy tumbles near two-year low as bank crisis routs market
West Texas Intermediate crude oil prices tumbled to approximately $67 per barrel on Thursday, falling below $70 for the first time since December 2021.
Crude oil prices declined on Wednesday as the bank crisis rattled the stock market: Goldman Sachs Group Inc. (GS, Financial) cut its U.S. gross domestic product forecast, citing the stress from small to medium-sized banks may weigh on aggregate demand.
Icahn equity portfolio overview
As of December 2022, Icahn’s $21.75 billion 13F equity portfolio contains 16 stocks with a quarterly turnover ratio of 3%. The energy sector is the guru’s second-largest sector with a 14.44% equity portfolio weight.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Icahn owns 16,414,532 warrants of Occidental Petroleum stock (OXY, Financial), giving the position 3.11% equity portfolio weight.
Shares of Occidental Petroleum traded around $58.66, showing the stock is modestly overvalued based on its price-to-GF Value ratio of 1.14 as of Thursday.
The Houston-based energy company has a GF Score of 76 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 7 out of 10, a GF Value rank of 3 out of 10 and a rank of 5 out of 10 for growth and financial strength.
Occidental’s profitability ranks 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 out of 9, a return on equity that outperforms over 87% of global competitors and a gross profit margin that has increased by approximately 3.7% per year on average over the past five years.
According to GuruFocus Real-Time Picks, a Premium feature based on Schedule 13D and 13G filings, Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) added 7,886,964 shares of Occidental on March 15, boosting the stake to 208,040,405 shares.
Icahn owns 71,198,718 shares of CVR Energy (CVI, Financial), giving the position 10.26% equity portfolio weight.
Shares of CVR Energy traded around $29.61, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.85 as of Thursday.
The Sugar Land, Texas-based petroleum refining and nitrogen fertilizer manufacturing company has a GF Score of 81 out of 100 based on a momentum rank of 9 out of 10, a profitability rank of 8 out of 10, a growth rank of 4 out of 10 and a rank of 6 out of 10 for GF Value and financial strength.
CVR Energy’s profitability ranks 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 out of 9 and a return on equity that outperforms more than 91% of global competitors.
Icahn owns 4,818,832 shares of SandRidge Energy (SD, Financial), giving the position 0.38% equity portfolio weight.
Shares of SandRidge Energy traded around $13.60, showing the stock is significantly overvalued based on its price-to-GF Value ratio of 1.33 as of Thursday.
The Oklahoma City-based energy company has a GF Score of 64 out of 100: Although the company’s momentum and financial strength rank 8 out of 10, SandRidge Energy has a modest profitability rank of 6 out of 10 and a rank between 1 and 2 out of 10 for growth and GF Value.
Icahn owns 1 million shares of Cheniere Energy (LNG, Financial), giving the position 0.69% equity portfolio weight.
Shares of Cheniere Energy traded around $146.88, approximately 31% less than its GF Value measure. Despite this, GuruFocus’ GF Value Line labeled the Houston-based energy company a possible value trap based on the company’s poor financial strength rank of 3 out of 10.
Cheniere’s warning signs of low financial strength include a poor Altman Z-score of 1.48 and a debt-to-Ebitda ratio that is above 4 and underperforms over 80% of global competitors.
Despite poor financial strength, Cheniere has a GF Score of 82 out of 100 based on a rank of 10 out of 10 for momentum and GF Value, a growth rank of 8 out of 10 and a profitability rank of 6 out of 10.