Herbalife Ltd. (NYSE:HLF) needs no introduction, and is the next largest-small cap in Icahn’s portfolio. The multi-level marketer had a market cap below $5 billion at the end of last quarter, but its value has since risen by about 50%. Over the longer term, Herbalife shares have more than doubled since the start of 2013, and the market hasn’t been convinced by Bill Ackman’s “pyramid scheme” accusations (see his full presentation here).
Icahn has shown no hesitation to call out Pershing Square’s manager for being “totally wrong” and “ridiculous” in his words, but Ackman hasn’t shown any signs of closing his short position in Herbalife. As for Icahn, he thinks the stock is still cheap at current levels.
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is the next largest small-cap in the activist’s equity portfolio, and surprise, surprise, this stock is having a good 2013 too. Shares of the organic food and personal care product company are up 37% this year, and Icahn closed out his $470 million position a little over two weeks ago. Since he established his Hain stake in early 2010, the stock’s price has risen from around $22 per share to the upper $70 range.
As CEO Irwin Simon explains in a recent interview with CNBC, “Hain today is positioned better than it was when Carl got in … because of the awareness of healthy eating.” In other words, it’s the secular tailwinds—not just Icahn’s influence on a couple M&A moves—that have driven Hain’s appreciation. The organic boom doesn’t look like it will end any time soon according to the USDA, so we still like Hain Celestial post-Icahn.
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