According to famed corporate raider Carl Icahn, energy plays like Southwest Gas (NYSE:SWX) are back in focus. The veteran hedge fund manager, who has a net worth of $15.8 billion according to Forbes, just picked up a considerable amount of SWX stock.
While his hedge fund, Icahn Capital, operates as the family office, the billionaire still manages more than $21 billion in 13F securities. Icahn Capital is also a part of Icahn Enterprises (NASDAQ:IEP), which is Icahn’s single largest position with a massive 61.82% portfolio allocation.
With that in mind, let’s get into the details of the SWX stock purchase.
Billionaire Carl Icahn Buys More SWX Stock
According to a Schedule 13D filing received by the U.S. Securities and Exchange Commission (SEC) on June 3, Icahn purchased 2.19 million shares of SWX stock. The “Date of Event” on the filing is May 23. After the transaction, the billionaire owns a total of 5.08 million shares. The energy company is also now Icahn Capital’s 10th-largest holding with a 2.07% portfolio allocation.
Icahn is clearly betting big on the return of energy. Out of his top five positions, four companies are engaged in the energy industry. This includes Icahn Enterprises, which is a diversified conglomerate with arms in several industries, such as energy, real estate and food packaging.
Meanwhile, Icahn’s second-largest position is CVR Energy (NYSE:CVI) with a 7.98% allocation, followed by Cheniere Energy (NYSE:LNG) with a 5.91% allocation. Interestingly enough, the fund manager sold off his entire 45 million share stake in Occidental Petroleum (NYSE:OXY) in the first quarter.
During times of high inflation, many investors flock to commodities like energy as a source of returns. This is because commodities are tangible assets whose worth is determined by their underlying intrinsic value. In times of high inflation, prices for commodities may increase.
Who Else Is Betting Big on SWX Stock?
Large funds offer liquidity and price support, so it’s important to monitor institutional ownership of a stock. During Q1, 300 funds reported owning SWX stock, an increase of 24 funds from the prior quarter.
However, the institutional put/call ratio sits at 1.57. This means more funds own put options against the company than call options. In addition, the put/call ratio rose from 0.56 during Q4. Still, this clearly did not dissuade Icahn from purchasing more shares.
With that in mind, let’s take a look at the company’s top five shareholders:
- BlackRock (NYSE:BLK): 10.14 million shares.
- Vanguard: 6.64 million shares.
- Carl Icahn: 5.08 million shares.
- T. Rowe Price (NASDAQ:TROW): 3.54 million shares.
- Fuller & Thaler Asset Management: 2.60 million shares.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.