Financier Carl Icahn, now worth more than $14 billion, disclosed in a 13G filing today that he now owns slightly more than 5% of the manufacturer Keystone Consolidated Industries, Inc. (OTC: KYCN). Though the nature of the filing indicates Icahn only has a "passive" investment in the company, news of his position sent the stock up over 5%.

Keystone is "a manufacturer of steel fabricated wire products, welded wire reinforcement, coiled rebar, industrial wire and wire rod for the agricultural, industrial, construction, original equipment manufacturer and retail consumer markets" in the U.S. The company is small, with a market capitalization of only $100 million, and its reputation hasn't fully recovered from filing for bankruptcy protection in 2004.

On paper, Keystone has been performing quite well recently with $57 million in net income for 2006 on $440 million in revenue - the company has a P/E of only 1.5 as the stock is hovering around its 52-week low price.

The company does have $360 million in total liabilities that are anchoring its stock price, but Keystone seems to be taking serious steps to become more robust. It just recently announced a reduction in its salaried workforce as well as $25 million in additional shares available to existing shareholders, the proceeds of which will be used to reduce the balance of its expensive revolving credit line.

Icahn certainly has a stellar track record, and his vote of confidence in Keystone, like his confidence in J.C. Penny, definitely makes it worth watching closely.

Icahn's Portfolio
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