On January 8, 2025, Carl Icahn (Trades, Portfolio) executed a significant transaction involving CVR Energy Inc. The firm added 878,212 shares to its holdings at a price of $18.25 per share. This move underscores Icahn's continued interest in CVR Energy, a company in which the firm already holds a substantial stake. The transaction reflects Icahn's investment philosophy of acquiring undervalued assets, often in distressed conditions, with the aim of revitalizing them for future sale. This strategic addition highlights the firm's belief in the potential recovery and growth of CVR Energy.

Profile of Carl Icahn (Trades, Portfolio)

Carl Icahn (Trades, Portfolio) is a renowned activist investor known for taking substantial stakes in public companies and advocating for change. The firm invests through three primary vehicles: Icahn Partners, American Real Estate Partners, and Icahn Management LP. GuruFocus tracks the portfolio of Icahn Capital Management, which includes a diverse range of stocks. Icahn's investment strategy involves buying beaten-down assets, often out of bankruptcy, and fixing them up for future sale. The firm targets companies that are not glamorous and usually out of favor, aligning with the belief that consensus thinking is generally wrong.

Overview of CVR Energy Inc

CVR Energy Inc, listed under the symbol CVI, is a U.S.-based holding company engaged in petroleum refining and nitrogen fertilizer manufacturing. The company operates several complex full-coking crude oil refineries and a crude oil gathering system. CVR Energy's market capitalization stands at $1.91 billion, and it is considered modestly undervalued with a GF Value of $23.95. The company's refineries process a variety of crude oil blends, and its products are supplied to customers through tanker trucks and throughput terminals. CVR Energy's customer base includes retailers, railroads, and farm cooperatives.

Details of the Transaction

The addition of shares increased Icahn's total holdings in CVR Energy to 67,570,593 shares, representing 67.21% of the company's stock. This transaction had a 0.16% impact on Icahn's portfolio, with CVR Energy now constituting 12.46% of the portfolio. The firm's strategic move aligns with its investment philosophy of targeting undervalued and out-of-favor companies for long-term gains. The transaction reflects Icahn's confidence in CVR Energy's potential for recovery and growth, despite the company's current challenges.

Financial Metrics and Valuation

CVR Energy's current stock price is $18.95, with a price-to-GF Value ratio of 0.79, indicating a modest undervaluation. The company has a PE ratio of 27.46 and a GF Score of 68/100, suggesting poor future performance potential. The company's balance sheet and profitability ranks are 6/10 and 7/10, respectively, while its growth rank is notably low at 2/10. These metrics highlight the challenges CVR Energy faces in achieving sustainable growth and profitability.

Performance and Growth Indicators

CVR Energy has a revenue growth rate of 33% over the past three years, though its EBITDA and earnings growth remain stagnant. The company's balance sheet and profitability ranks are 6/10 and 7/10, respectively, while its growth rank is notably low at 2/10. The company's Altman Z score of 2.36 and Piotroski F-Score of 5 indicate moderate financial health and operational efficiency. Despite these challenges, Icahn's investment suggests a belief in the company's potential for recovery and growth.

Other Gurus Involved

Besides Carl Icahn (Trades, Portfolio), other notable investors holding shares in CVR Energy include HOTCHKIS & WILEY, Joel Greenblatt (Trades, Portfolio), and Barrow, Hanley, Mewhinney & Strauss. These investors' involvement in CVR Energy indicates a shared belief in the company's potential for recovery and growth. The presence of multiple prominent investors highlights the interest in CVR Energy as a potentially undervalued asset with opportunities for future gains.

Conclusion

Carl Icahn (Trades, Portfolio)'s strategic addition to CVR Energy highlights a continued belief in the company's potential for recovery and growth. The transaction aligns with Icahn's investment philosophy of targeting undervalued and out-of-favor companies for long-term gains. Despite the challenges CVR Energy faces, Icahn's investment suggests confidence in the company's ability to overcome these obstacles and achieve sustainable growth. This move underscores the firm's commitment to identifying and capitalizing on undervalued opportunities in the market.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.