(Nasdaq: WBMD) -- Increased position
Icahn acquired 5.7 million shares of WebMD last quarter, raising his total stake to 11.6%. His current stake is worth more than $200 million.

This leading health care information website is struggling due to reduced advertising spending by drug makers. Shares have plummeted 57% in the past 12 months, and 2012 is expected to be challenging as well. WebMD is expecting declining revenue and a possible $2 million operating loss this year. 

Despite these problems, as my colleague David Sterman pointed out in this article, WebMD's long-term growth story remains very much intact. The company is a vital resource for patients seeking medical information and likely to grow in tandem with the senior citizen population, which has a voracious appetite for health care services. The downturn in ad spending is likely only a temporary slowdown in the company's upward growth trajectory.

Icahn knows WebMD will turn profitable when ad spending picks up and opposed the company's plan to sell itself. Instead, he suggested  WebMD use its cash to buy back stock. The company must be listening; WebMD announced plans to repurchase $150 million worth of stock, or 11% of outstanding shares. With cash of $1.1 billion nearly equal to its $1.4 billion market value, WebMD shares have little downside risk. 

Risks to consider: Not every Icahn investment is a home-run. For example, bids for Clorox (NYSE: CLX) and Commercial Metals (NYSE: CMC) failed when he couldn't sway enough shareholders. You should think of Icahn's portfolio as a starting point for your own research, not a reason to invest.

Action to take --> Icahn is most successful when he acquires stakes in smaller companies and can exert more control. This is why my top picks are the two smallest companies discussed in this article, WebMD and CVR Energy. Navistar is bigger, with a $3.1 billion market value, and El Paso qualifies as a large-cap stock based on its $21.4 billion market capitalization.

Lisa Springer