Is It Time To Invest In Icahn Enterprise?IEP), the holding company of legendary activist investor Carl Icahn, has been wounded by the collapse in the price of oil. This has resulted in the company's equity portfolio having large paper quotational losses. Despite these paper losses, Icahn Enterprise reported a profit second quarter of $212 million or $1.56/unit. This profit was driven by profitable realized capital gains from investments like Netflix (NFLX). Due to the company's diversified source of income from its various investments and operating subsidiaries protects the company's underlining economic earnings.
The firm spread its investment capital over multi-industries which reduces investors risk with no one source makes up the majority of earnings for Icahn Enterprises. Carl Icahn and his management team has built a financially strong and sound company that can withstand the collapse in oil price. The company operates in numerous sectors through its 10 operating subsidiaries. Some of Icahn Enterprise's subsidiaries trade shares publicly.
Icahn Enterprises Subsidiaries:
- Icahn Capital LP - 100% owned by Icahn Enterprises and has investments valued at fair market value of $4.5 billion in the investment funds.
- PSC Metal Inc. - 100% owned by Icahn Enterprises. The company is the largest independent metal recycling company in the U.S.
- AREP Real Estate Holdings LLC - 100% own by Icahn Enterprises. The company owns and operates rental commercial real estate and has resort activities.
- Viskase Companies Inc. (VKSC) - 73% owned by Icahn Enterprise and the rest of the shares trade on the over the counter market. The company is a world leader in cellulosic, and plastic casing for processed meat industry.
- American Railcar Industries Inc. (ARII) - 54% owned by Icahn Enterprises. The company manufacturers hoppers and railcars. American Railcar also provides railcar repair and maintenance services.
- Tropicana Entertainment Inc. (TPCA) - 65% owned by Icahn Enterprises. The company is a publicly traded gaming company that owns and operates eight casinos and resorts. These casinos and resorts operates in Indiana, Louisiana, Mississippi, Nevada,Missouri,New Jersey and Aruba. Collectedly the company owns approximately 5,500 rooms,8,000 slot positions and 270 table games.
- Federal-Mogul Holdings Corp. (FDML) - 82% owned by Icahn Enterprises. The company is a leading global supplier to automotive, aerospace, energy, heavy duty trucks, industrial, marine and power generation.
- CVR Energy Inc. (CVI) - 82% owned by Icahn Enterprises. It is a energy holdings company that has interest in two seperate operating subsidiaries.
Currently, as I write this article, Icahn Enterprises is selling for less than its net asset value of $66.70/unit. The company is selling for $66.20/unit of less than 1% discount to net asset value. In after hour trading on Tuesday shares fell to $65/unit. Clearly Icahn Enterprises is being hit hard by what is happening in the market and energy sector. All of this has created an opportunity for investors to invest in Icahn Enterprises.
Published on Oct 3, 2015By Cody Eustice