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Widely known as a corporate raider and activist investor, Carl Icahn views himself as a classic value investor. His company describes the Icahn strategy in simple terms:"We seek to find undervalued companies in the Graham & Dodd tradition. However, while the typical Graham & Dodd value investor purchases undervalued securities and waits for results, we often become actively involved in the companies we target."Based on this description, it is easy to understand Icahn's interest in Dell (NASDAQ: DELL), a company with more than $12.7 billion in cash, about $7 a share. Potential bids are about $25 billion for the company. That values the operating business with sales of $55 billion and profits of $2.4 billion at about $12.3 billion, about five times earnings.
On the monthly chart, TTWO is breaking out of an extended consolidation pattern pointing toward a $19 price target. The weekly chart shows the time to buy is now as the relative strength (RS) rank is at 96.79, meaning TTWO has outperfomed almost 97% of all other stocks in the past six months.TTWO is a stock that typical value invetsors might overlook but Carl Ichan owns more than 12 million shares, about 14% of the company. His most recent SEC filings show that he was a buyer in the last three months of 2012, after prices recovered from that large dip.Recommended Trade Setup:-- Buy TTWO up to $16-- Set stop-loss at $15, a previous resistance level-- Set initial price target at $19 for a potential 19% gain in 6-12 months
What I'm seeing today is one of the biggest disconnects I've seen. It makes absolutely no sense!
For those who missed the move to all-time highs, a better buying opportunity may be right around the corner.
I discovered a collection of conflicting assertions that seemed to be pointing to a weak American consumer... but with a twist.