Opinions
Hap (Robert) Sneddon FCSI
Icahn Enterprises LP
IEP-Q
BUY
Aug 27, 2014
Stock price when the opinion was issued
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IEP’s dividend yield always looks attractive, given the recent drop in share price, the current yield reaches approximately 35%. The recent short report in IEP claims that the dividend payment is unsustainable and is funded by share issuance, that IEP’s investment and operating performance is not so great, and IEP’s share price traded at a premium Net asset value (NAV), while most peers trade at a discount. The dividend may not be sustainable at the current rate, and the share price could experience further downward pressure, if there is a dividend cut. As a limited partnership, the dividends received will be subject to a withholding tax of up to 37%. There is also a 10% tax on the proceeds of the disposition of an LP. We do see the shares as binary, and right now we would be reluctant to own them.
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Had a really big move and has come back a little bit. We are now seeing a little bit of a nascent breakout. Moving averages are all in the right order. This looks like a pretty good investment. Has good support greater run the $105 range. Dividend yield of about 5.3%.