Owner Carl Icahn makes $30 million buy.
On Tuesday, August 13th, billionaire investor Carl Icahn bought 4,572,521 more shares of a company he already owns more than 10 percent of, Conduent (CNDT). The stake, costing just under $30 million, increased the size of his holdings by about 14 percent to over 36.2 million shares.
Icahn has previously bought shares in May, when he picked up over 6 million shares in three separate purchases.
One director has bought this year, and no insiders have sold in over one year, when shares traded over 60 percent higher than today.
Conduent provides business process services in various segments for both commercial industries, the government, and transportation.
Action to take: With shares down over 67 percent in the past year, and with the company facing a heavy debt load of $1.91 billion, or about $600 million more than its equity right now, Icahn’s ability to make drastic changes appear necessary here to get the company back to profitability.
While we prefer to invest alongside Icahn, we also see shares as likely to continue dropping from their current price around $6.55. We suggest investors buy a put option with a $5 strike to bet on a further drop in the coming months, but consider going long at or under $5 per share.