Is It Time To Invest In Icahn Enterprise?

Icahn Enterprises (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.
Icahn Enterprises has interest in multiple sectors of the economy. Icahn Enterprises has fallen from a high of $120/unit to its current price $66/unit. Since the beginning of the year Icahn Enterprises units have fallen by over 30%, mainly caused by the collapse in the company's energy investment.

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:The company reported second-quarter results in August, which were down compared to the second quarter of last year. Icahn Enterprise reported net income of $212 million or $1.53/unit on revenues of $5 billion. Revenues for the second quarter was down more than $1 billion compared to the $6 billion in the previous second quarter of last year. The company's net income was half of last year's of $489 million or $4.06/units. Clearly the company's earnings and revenues were hurt by the collapse of the price of oil.

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, 2015
By Cody Eustice
Cody is a freelance writer who has been writing financial articles for various sites for over a year now. He is a value investor looking for companies that sell for far less than their estimated business value.

Copyrighted 2020. Content published with author's permission.

Posted in ...