Icahn Boosts Stake in Apple (AAPL), Calls it a “No Brainer” Investment

Activist investor, Carl Icahn disclosed that he increased his position in Apple Inc (NASDAQ:AAPL) to $3 billion as he continue his effort to encourage the management of the iPhone and iPad maker to repurchase more shares.

Icahn tweeted that that he acquired $500 million worth of shares over the past two weeks. He described his investment as a “no brainer” and indicated that he will soon release an in-depth letter explaining why the company needs to buy back more shares. In one of his tweets, Icahn said, “We feel $AAPL board is doing great disservice to shareholders by not having markedly increase its buy back.”

In an interview with Scott Wapner of CNBC’s Fast Money Half Time Report, Icahn explained why he called his Apple Inc (NASDAQ:AAPL) investment a “no brainer.’ According to him, the stock is trading at 2014 consensus of 9x earnings compared with the S&P selling at 17X earnings. He added that the iPhone and iPad maker is growing. He said, “It sort of amazing to me that it’s just not picked up. You know, Apple is a culture. They’ve got a great ecosystem. They’re going to be doing 42% of these studies show of this great growth category—in the cellphones, handheld business. They keep coming out with— I wouldn’t say revolutionary products but evolutionary ones.

During the interview, Icahn reiterated that the board of Apple Inc (NASDAQ:AAPL) is doing a tremendous disservice particularly to smaller shareholders for letting its $150 billion cash sitting and not using it to do a huge buy back.

On the other hand, he emphasize that saying such words about the board is like contradicting himself. He explained, “The largest shareholder, actually guys like me, I’m talking against myself. I should thank them because I’m able to buy stock cheaper than if they went out and used that money to buy back stock.”

Icahn clarified that he is not criticizing the management of Apple Inc (NASDAQ:AAPL) with the way it operates itself. He thinks the management is doing a great job. Icahn’s criticism is directed to the board of the company.

In a separate interview with Trish Regan of Bloomberg Television, Icahn said, “I just think that the board is just plain wrong in not taking advantage of a very undervalued situation at Apple and not using that capital.”

Apple Inc (NASDAQ:AAPL) is one of the largest stockholdings of Icahn in his portfolio. During the third quarter, his stake in the company was worth $1.85 billion and it was his fourth largest position. His second largest position was CVR Energy Inc (NYSE:CVI) and his stake was worth $2.72 billion. If Icahn did not increase his stake in CVR Energy, Apple is now his second largest position given the value of his stake at $3 billion.