, activist investor of Icahn Enterprises, added 11.12%, or
1,787,388 shares of Navistar International Corp. (
) at between $22 and $23 per share on July 11. After the
transactions, he owns 9,038,814 shares, or 13.19% of the company.
Navistar International is a holding company of military vehicle,
diesel engine, RV, bus, and other vehicle-related businesses.
Icahn initiated a position in the company in the third quarter of
2011 buying 1,765,647 shares at an average price of $44. In the
fourth quarter of 2011, he added 5,485,779 shares at an average
price of $38.50. In the current second quarter he has been adding
shares more aggressively, with four new buys in a little over a
News that coincided with his first second-quarter purchase on
June 7 was the announcement of a management reorganization and
second-quarter financial results, which CEO Daniel Ustian called
Navistar reported a $172 million net loss, or $2.50 per diluted
shares, for the second quarter, compared to net income of $80
million in the prior-year quarter. In the first six months ended
April 30, it recorded a net loss of $302 million, or $4.69 per
diluted share, compared to net income of $94 million for the same
period of 2011.
The company experienced particular challenge in its truck segment
due to lower military budgets, industry-wide higher commodity and
fuel costs and various charges. The segment reported a loss of
$108 million, compared to $2 million in the year-ago second
quarter. Sales in the segment increased 4% due to increase volume
in traditional markets and strong volume in South America.
Its engine segment also recorded a net loss of $108 million and a
6% decrease in sales volumes. Its parts segment had a $41 million
profit, driven by changes in military budgets. Its financial
services segment had a $26 million profit, which the company
expects to slowly decline as it liquidates its U.S. retail loan
portfolio as it obtain U.S. retail financing from GE Capital.
The company revised its full-year net income guidance to between
breakeven and $140 million, or $0 to $2 adjusted diluted earnings
per share. This is after announcing full-year guidance in the
first-quarter of $295 and $365 million or $4.25 to $5.25 adjusted
diluted earnings per share.
Icahn discussed Navistar in a
July 9 Bloomberg interview
, saying that he was not sure yet what he sort of change he would
push for at the company, but that it did not suffer from the same
board issues that his other companies have. He thinks the main
culprit has been the new type of diesel engine it is developing
that uses low-emission liquid urea as fuel, which has not yet
obtained regulatory approval.
Navistar has a P/E ratio of 271.3 and P/S ratio of 0.1 and an
annual average earnings growth of 3.4% over the past 10 years.
Icahn's Navistar purchases have pushed it up to the eighth
largest position in his portfolio. His top holdings are Icahn
Enterprises LP (
), Federal-Mogul Corporation (
), Motorola Mobility Holdings Inc. (
), Forest Laboratories Inc. (
) and Amylin Pharmaceuticals Inc. (
See all of Icahn's holdings in his
. Also check out the
, Top Growth Companies and High Yield stocks of Carl Icahn.About
GuruFocus: GuruFocus.com tracks the stocks picks and portfolio
holdings of the world's best investors. This value investing site
offers stock screeners and valuation tools. And publishes daily
articles tracking the latest moves of the world's best investors.
GuruFocus also provides promising stock ideas in 3 monthly
newsletters sent to