Icahn Enterprises L.P. (NASDAQ:IEP) Q3 2019 Earnings Conference Call - Final Transcript
Nov 05, 2019 • 10:00 am ET
Thank you. [Operator Instructions] And our first question comes from Dan Fannon from Jefferies. Your line is open.
Hey, this is actually James Steele filling in for Dan. Good morning.
So my question is just on, kind of, your outlook on valuation, noting that the hedge fund is getting less net short -- regardless net short throughout the quarter. So just, kind of, wondering what the house view is on valuation and how you're approaching things there?
Yes, sure. I would describe the adjustment of net exposures from previous quarter end to this quarter end, that sort of specific view on the -- that we basically had at the end of August beginning of September, regarding trade negotiations and whether progress would be made. And so I would describe that more as a tactical, trading opportunity, which we do once in a while, I describe it is rarely. But I would even say that some of those shorts have been sort of re-established at higher levels, it was sort of a -- it was a short-term view for the month of September related to China-trade negotiations.
Understood. And then just...
Yes per valuation, sure. So your second part of your question for valuations. I mean, look, it's, I mean, we've been pretty consistent, there's certain pockets, a certain investment themes within the fund that we're seeing where the activist model can create a good favorable risk-reward profile. But broadly speaking, yes, we're finding less opportunities than in a market that would be 25% lower that sort of goes without saying, but, yes, we're still fine in picking spots here or there, but it's been very long in the cycle, this bull market you're approaching 10.5, 11 years valuations have brought the -- we are much -- we as you know, we have a value investing approach. And so it's a little bit harder to find names, but I think we're still doing okay.
Got it. And secondly, I guess since the last time we heard from you guys, the outlook for interest rates this sort of changed. So just knowing that you just finished paying down debt issuing some more debt and have some more cash on the balance sheet from Ferrous. Just curious what the appetite might be for? Or what the need might be for more debt just given the outlook for future acquisitions?
Yes, I think, we'll really approach that on an opportunistic basis. So what I mean by that is, I'm sure you're familiar with our current debt stack or debt maturity ladder and it's pretty, pretty well balanced from 2022 through 2026, as we get closer to 2022, obviously, we'll look to do some normal refinancings eventually. And as far as adding incremental debt, it will really just be what the market looks like from a rate perspective, meaning if we can add some new seven or eight year that compelling rates, we will do that. I mean, we like -- we