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Carl Icahn Bets Big on Xerox

Guru Carl Icahn ( Trades , Portfolio ) is an American business magnate, investor, activist shareholder and philanthropist. He is the founder and majority shareholder of Icahn Enterprises, a diversified conglomerate holding company based in New York City.

On Nov. 11 Icahn bought 72,218,801 shares of Xerox ( XRX ).

On Dec. 14, he added another 10,087,023 shares for a 13.97% increase in his holding. He now owns a total of 82,305,8245 shares of Xerox.

Xerox was founded in 1906. The company is engaged in business process and document management solutions. Xerox has more than 130,000 people doing business in more than 180 countries.

Last year Xerox made $19.5 million in total revenue last year, and this year they are on pace for close to $17 million in total revenue.

Icahn may be purchasing large amounts of Xerox because of the leadership of Ursula Burns as the CEO.

Burns became CEO of Xerox in 2009 and immediately took a courageous risk with the largest purchase in Xerox history, the purchase of affiliated computer services. President Obama has also appointed Burns to help lead the White House national program on Science Technology, Engineering and Math ( STEM ). She was also appointed chair of the President's Export Council in 2015 after service as vice chair since 2010.

She also demonstrates fantastic leadership. One of Warren Buffett (Trades, Portfolio)'s top four rules for investing is that the company must be run by a vigilant leader. Burns shows that she's a vigilant leader when she was quoted saying "We all need to be more impatient with the status quo. I believe we all need to shift the emphasis in our thinking from why we can't create more jobs to how we can create more jobs; from why we can't compete to how we can compete; from why hunger and poverty and injustice exist in the world to how they can be eliminated. In other words, we all need to be a little more impatient."

Xerox has a few more good signs about their company:

  1. Xerox's operating margin is expanding. Margin expansion is almost always a good sign.

  2. The dividend yield is close to the 10-year high.

  3. P/B ratio of 1.16 is close to the one-year low of 1.08.

  4. P/S ratio of 0.62 is close to the two-year low of 0.58.

  5. Burns is focused on the growth of the company over the next 75 years, and they're already developing futuristic technology such as automated technology, and human-like computers.

The fact that Xerox invests so much time and energy in research shows that they are truly committed to adding value and maximizing the potential of their employees.

"Diversity is about more than race and gender; it's about more than numbers. It's about inclusion. Diversity means creating an environment where all employees can grow to their fullest potential," Burns has said.

Disclaimer: Author does not currently own any shares of Xerox.

Cheers to your investment success.

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This article first appeared on GuruFocus .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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