Icahn Gets Active With Kroger

JC Parets
April 1, 2022

We begin today’s discussion with a special situation that took shape this week.

At the end of the day, what we’re trying to do here is create a universe of stocks that are experiencing bullish activity from investors who have better information than the rest of us.

Typically, this information comes to us in the form of SEC filings, options flow, or through congressional reporting. But that’s not always the case!

A few days ago, Carl Icahn published a letter that he wrote to the CEO of Kroger $KR about an activist position he’s taking in the stock.

While there’s yet to be a filing revealing ownership details, there will be in the future.

If Icahn does not take an ownership stake of greater than 5%, we won’t know how much he owns for roughly another 45 days when the quarterly 13F report is filed.

And, even then, the information will be as of March 31 and thus not include any subsequent purchases.

In my experience, Icahn likes to avoid reporting his activity unless he absolutely has to.

I wouldn’t be surprised if he owns just under the 5% threshold that would trigger a 13D filing. It wouldn’t be the first time we’ve seen something like this from Uncle Carl.

We can see some ownership information on Kroger.

Another famed investor, one with a passive approach, is the third-largest owner, with more than 8% of outstanding shares. It’s Warren Buffett.

So, you’re getting bullish signals from two of the best in the business with this one.

While we wait to find out the details on Icahn’s stake, he is nominating directors to the board and getting busy with impacting change.

According to the letter, his main grievances focus around executive compensation, mistreatment of employees, and “Kroger’s pathetic approach to animal welfare.”

This is one we will definitely be keeping on our radar.

Here’s The Hot List, with data through March 31, 2022:

There was a significant Form 4 filing by Nelson Peltz’s Trian Fund, which reported a purchase of another 682,514 shares of Janus Henderson Group $JHG.

This is the third time Trian has reported a purchase over the trailing month. The fund now owns around 32 million shares, representing an ownership of 18.6%. 

As previously discussed, Trian has also been building a significant position in another asset management stock, Invesco $IVZ.

In its latest Form 4 filing, Turtle Creek Asset Management reported a buy worth roughly $9,897,396 in JELD-WEN Holding $JELD, as the hedge fund continues to accumulate shares.

Legion Partners Asset management LLC filed a 13D revealing a 6.8% ownership stake in the small-cap footwear retailer Genesco $GCO.

The only 13G on our list today was filed by Hound Partners LLC revealing a 9.55% ownership stake in Stronghold Digital Mining $SDIG.

The fund just upped its existing stake in the battered Bitcoin miner by about 20% as the stock makes new all-time lows.

In the options market, there was bullish options activity in Cameco Corporation $CCJ and Snap Inc $SNAP.

On the other hand, brick-and-mortar retailer Macy's $M witnessed bearish option flow.

Have a great weekend. We'll be back Monday with more insider action.

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All Star Charts Team

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