Carl Icahn Cuts Stake In Apple By 13%
Carl Icahn cut his stake in Apple Inc. (NASDAQ: AAPL) by 13.3 percent as of December 31, 2015, which equates to about 7 million shares. His holding now stands at 45.8 million shares.
Icahn's latest 13F filing also showed a decreased stake in Gannett Co Inc (NYSE: GCI). The filing show an increased stakes in American International Group Inc (NYSE: AIG), Cheniere Energy, Inc. (NYSE: LNG), Freeport-McMoRan Inc (NYSE: FCX), Hertz Global Holdings Inc (NYSE: HTZ) and Tegna Inc (NYSE: TGNA).
Icahn wrote a praising letter to Apple CEO Tim Cook in May 2015. One excerpt included the following:
"It is our belief that large institutional investors, Wall Street analysts and the news media alike continue to misunderstand Apple and generally fail to value Apple’s net cash separately from its business, fail to adjust earnings to reflect Apple’s real cash tax rate, fail to recognize the growth prospects of Apple entering new categories, and fail to recognize that Apple will maintain pricing and margins, despite significant evidence to the contrary. Collectively, these failures have caused Apple’s earnings multiple to stay irrationally discounted, in our view."
Icahn said Apple was worth $240. To arrive at a $240 target, he forecast Apple's fiscal 2016 earnings per share to be $12.00 (excluding net interest income). An 18x multiple on the estimated earnings combined with Apple's $24.44 of net cash per share results in the aggressive price target.
Icahn told CNBC in September that he thought the stock was cheap and that Wall Street does not fully appreciate Apple: "I think Apple is still ridiculously underpriced."
Shares were trading above $125 at that time, but have suffered a steep fall. The stock closed Tuesday at $96.64, and was trading down about 0.5 percent in the after-hours session.
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