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Carl Icahn's Favorite Investment Idea These Days Is Carl Icahn

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Fortune: What is your favorite company?

Carl Icahn: Icahn Enterprises (IEP). The company sells at approximately $41.45 per share and has a war chest of over $1 billion in cash and $2.8 billion in securities. Earnings for the first quarter ending March 31st were $2.68 per share. It also owns 76% of a major automotive company called Federal-Mogul which I believe is also undervalued (selling at approximately $20.50 per share.) We purchased Federal Mogul's debt and helped restructure the company in bankruptcy. We replaced inept management with Jose Maria Alapont who proceeded to reduce costs by over $400 million without affecting revenue. Federal-Mogul is a global supplier of powertrain and safety components, serving manufacturers of light and commercial vehicles as well as the worldwide aftermarket. The company has leading technology within its product segments, having filed over 2,200 patents in the last five years, and has some of the best and most recognized brands in the automotive industry, including, Champion, Wagner and Moog. Because of its diversification, Federal-Mogul continued to generate strong cash flow during the downturn and saw a 33% increase in EBITDA between 2009 and 2010. Additionally, the company is well-positioned to take advantage of the explosion in demand for auto parts in Asia and other emerging markets.

Carl Icahn Talks Investment Worries And Opportunities [Fortune]

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