Activist investor Carl Icahn yesterday announced that he's
walking away from
Dell (Nasdaq: DELL)
, paving the way for Michael Dell to regain control.
Icahn's decision ends a battle for the beleaguered computer
maker that has raged since March. With an 8.9% stake in Dell
estimated to be worth $2.2 billion, Icahn had a lot to win or
lose with Dell.
But it seems that his interests have shifted to another
well-known tech company:
Apple (Nasdaq: AAPL).
The billionaire has acquired a $1.5 billion stake in Apple, and
is advocating a sizable increase in the company's share buyback
program. A larger buyback would increase the company's earnings
by reducing the share count.
Now Dell is tiny compared with Apple. In fact, the market cap
of Dell equals just 5% of Apple's market value. One of the
few similarities between the companies is that both trade at
13-times this year's earnings. Compared with the S&P 500
index with a PE multiple of 16, and both companies are
But given the possibility of Michael Dell turning around the
struggling computer maker or Tim Cook and the Apple team creating
new and innovative products, I'll take Apple any day of the
It looks like Icahn has placed the Icahn Enterprises (Nasdaq:
IEP) chips on Apple as well. While I liked Apple a lot
around $400, shares remain attractively priced today.
Full Disclosure: I personally own shares of Apple.