Portfolio Spotlight: Carl Icahn
With all the news about Carl Icahn's strong encouragement of Yahoo!(YHOO - Cramer's Take - Stockpickr) to sell itself to Microsoft(MSFT - Cramer's Take - Stockpickr) for more than $34 per share, focus has been directed to Icahn -- who he is, and in what he invests.
Carl Icahn is the famous corporate raider who got his start with his hostile takeover of TWA in 1985. Not many people are aware that Icahn attended medical school at the New York
University School of Medicine after graduating from Princeton University with a B.A. in Philosophy. He made his billionaire fortune partly from the junk bonds issued by Michael Milken. Icahn's portfolio can be found at Stockpickr.com.
One of the Icahn stocks with the lowest price earnings to growth ratios is Perry Ellis International(PERY - Cramer's Take - Stockpickr), the Miami, Fla.-based apparel company that sells under various brand names including Perry Ellis, Axis, Tricots St. Raphael, Jantzen, John Henry, Cubavera, Natural Issue, Munsingwear, Grand Slam, Original Penguin and C&C California.
The company recently reported that its latest quarterly earnings were down 4% due to integration of recently purchased brands, including Liz Claiborne's C&C California and Laundry Brands, and a closed distribution center. The stock has a P/E of 13 and a PEG of 0.56.
Perry Ellis shows up in an interesting Stockpickr portfolio called Vogue Magazine Sept 07 Advertiser's List, which lists the stocks of companies that advertised in Vogue. Other stocks in the portfolio include Luxottica Group SpA(LUX - Cramer's Take - Stockpickr), with a PEG of 1.27; Nike(NKE - Cramer's Take - Stockpickr), with a PEG of 1.32; and Allergan(AGN - Cramer's Take - Stockpickr), with a PEG of 1.22.
Another stock of Icahn with a low PEG is Lear(LEA - Cramer's Take - Stockpickr), the manufacturer of auto seat systems, electrical distribution systems and other electronic products. The company agreed to buy a 75% stake in the automotive interior fabric manufacturer, New Trend Group. The stock has a P/E of 6 and a PEG of 0.67.
Lear is also owned by another top stock trader, Mohnish Pabrai, who is considered by many to be another Warren Buffett. His fund has had an average annual return of 26.2% since its inception in 1999. Pabrai also owns Ternium S.A.(TX - Cramer's Take - Stockpickr), with a PEG of 1.58; Sears Holdings(SHLD - Cramer's Take - Stockpickr), with a 3.08 PEG; and CryptoLogic(CRYP - Cramer's Take - Stockpickr), with a 0.72 PEG.
( Winston's Comment: Mohnish Pabrai just paid $650,100 to have lunch with Warren Buffett ).
Williams Companies(WMB - Cramer's Take - Stockpickr), the natural gas company, is another Icahn stock with a low PEG ratio. The company recently announced that it spent $670,000 in its first-quarter to lobby on proposed natural gas regulations. The stock has a P/E of 17 and a PEG of 0.90.
Williams is owned by the AIM Energy Fund, a four-star rated fund by Morningstar that is managed by John Segner. The fund has had an average annual return of 31.42% over the last five years. AIM also owns National Oilwell Varco(NOV - Cramer's Take - Stockpickr), with a 0.39 PEG; Occidental Petroleum(OXY - Cramer's Take - Stockpickr), with a PEG of 0.62; and Southwestern Energy(SWN - Cramer's Take - Stockpickr), with a 1.28 PEG.