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Carl Ichan's Cheap...but I'm still not buying

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June 01, 2010 – Comments (1)

 

I managed to sneak a few minutes of reading in at the beach this weekend while the kids fell asleep and I actually learned something both new and interesting by reading Barron's.  

The famous investor Carl Ichan actually has a publicly traded investment vehicle.  Better yet, the sum of the value of the parts that the vehicle contains is greater than the the current price of its stock.  I love situations like this...too bad I don't love Carl Ichan (more on that later).

Here's the details of Ichan Enterprices' (IEP) major holdings (in millions): 

Stake in Ichan's hedge fund + cash:                               $2,875

75 million shares of Federal Mogul (FDML):                     $1,300

11.6 million shares of American Railcar (ARII):               $165

Position in food packaging company Viskase (VKSC):     $125

Private Scrap Metal Operations:                                     $500

Real Estate holdings in Atlanta, Dallas, and Las Vegas:   $1,000

Stake in a disastrous textile company called Westpoint:  $300

An investment company that Ichan bought for $810:         $100 (ouch)

Total Assets:                                                                $6,365

Minus Debt:                                                                  $2,650

Total Value of Assets:                                                    $3,715

Value Per Share:                                                         $44.00 

Share Price at the time the article was written:          $33.00

Share price after today's 10% post-article explosion    $38.00 

I have a feeling that today's Barron's pop on this relatively illiquid stock, with an average volume of only 17,000 shares per day (it's at 42,500 shares already this morning) would probably be better played as a short than a long in the short-run, but if IEP falls to around $30 per share again (its high in 2007 was a staggering $134) I would have to seriously consider adding it in my CAPS portfolio.

Ichan didn't amass a $10 billion fortune and a reputation as a savvy investor by accident.  His purchase of the Las Vegas Stratosphere for a total cost of $300 million and his subsequent sale of it at the very peak of the market in 2007 to a Goldman Sachs real estate fund for $1.3 billion was a masterpiece.  So some of you might find this trade interesting. 

I don't think that I could ever bring myself to personally invest alongside Ichan in real life though.  At the age of 74, he's made a number of huge investments over the past couple of years that have left me scratching my head, including Motorolla (MOT) and Yahoo! (YHOO).

Source:  The Billionaire Is a Bargain

Deej 

1 Comments – Post Your Own

#1) On June 04, 2010 at 1:18 PM, chk999 (99.98) wrote:

It's Carl Icahn.

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