Getting A Legend For Nothing

At the Ira Sohn conference, Carl Ichan gave a stock pick: himself. Icahn is the chairman of Icahn Enterprises, L.P. IEP, which is a holding company similar to Berkshire Hathaway BRK. The company, through its subsidiaries, engages in the investment management, automotive, metals, real estate, and home fashion businesses both in the U.S. and abroad. Icahn said that was not sure why Warren Buffett deserved a premium, and he did not have one in shares of Icahn Enterprises. Shares are well off their highs, having traded well above $100 per share in 2007, and traded around $130 per share as recently as January 2008, at the height of the financial crisis. Since then, shares have continued to drop, and are now trading around $42, as of this writing. The company spits out a healthy dividend, yielding 4.8%, so it is not quite clear why shares have never returned to their pre-financial crisis highs, or anywhere close to them. At the conference, Icahn said shares are going to be a good currency for the future, but are too cheap now. This indicates that Icahn is going to be on the prowl for more acquisitions, but did not give any specific names. He did however say that he sees potential in Asia, as he believes there are great opportunities there. Ichan said that since he shut down his hedge fund, Icahn Associates, he will be spending more time with Icahn Enterprises, which can only be beneficial for shareholders over time. The company has over $2.8 billion in liquid assets, and has a market cap of around $3.5 billion. Icahn said that you're essentially getting Carl as a manager for a negative number. If you can get a legend like Icahn or Buffett for nothing, then perhaps it may be time to take a second look at them. After all, they are legends for a reason.