Activist investors are a dime a dozen these days, yet some of them are redefining capital markets like no one else. Carl Icahn has an amazing knack of identifying undervalued companies and unlike Warren Buffett who sits comfortably after buying a stake, he makes it a point to ensure that the management takes note of his interest and delivers. Besides, he mostly manages to wriggle his way into favor. Nuance Communications Inc. (NASDAQ:NUAN), Icahn Enterprises LP (NASDAQ:IEP), and Transocean LTD (NYSE:RIG) are three plays through which investors can participate in Icahn’s dealings. Here is a closer look:

Carl Icahn

Massachusetts based technology firm Nuance Communications Inc. (NASDAQ:NUAN) is one of its kind in terms of providing voice and language solutions. The company is apparently behind Apple’s celebrated Siri personal assistant although this has not been officially acknowledged by either of the companies. Icahn revealed a 9.3% stake in the company at the starting of the month, following which the stock has been on a roll, jumping 7% so far. As Siri is likely to make it to mass-market automobiles pretty soon, it will most probably open another solid stream of licensing revenues. The stock’s attractiveness is underlined by a forward price earnings ratio of 10.3 and analyst recommendations which are mostly positive. Probably what brought the company on Icahn’s radar were the abrupt increases in sales and marketing expenses as well as the bump in interest expenses during the most recent quarter. The increase in these expenses caused the company to post a loss of $22 million from a profit of $9.3 million from Q4 2011 despite revenues surging 28% to $462.2 million.

Icahn’s holding company Icahn Enterprises LP (NASDAQ:IEP) is another way to play the game. Some quick back-of-the-envelope calculations reveal that the stock is undervalued although this is quickly vanishing, especially after the 18% rally last week, as more investors see value emerging in the stock. Since this is a holding company, the bottom-line for investors is that there will almost always be a conglomerate discount attached to it. The current valuation nevertheless looks attractive as the stock trades at a price earnings multiple of 17.7 and offers a dividend yield of 6.3%. Jefferies recently started covering the stock with a buy rating and target price of $66, partly fueling the late rally. A holding company is a great way to get exposure to a number of businesses in one go, but historical tendency of such stocks consistently shows them staying below the intrinsic value of their holdings, making them good for theory lectures in colleges.

Transocean LTD (NYSE:RIG) – an offshore contract drilling services provider for oil and gas wells – has caught the fancy of this activist investor lately. In the latest regulatory filing, Icahn has disclosed controlling a 5.4% stake, which he has been ramping up gradually. While there is little doubt about the profitability in Transocean’s line of business as reflected in a forward price earnings ratio of just 8.8, the stock does not necessarily feature on big investors’ radar. Part of the reason is the overly relaxed management which seems to have gotten too cozy with the idea of acquisitions at astronomical valuations. Icahn contends the management destroyed $11 billion of shareholder value by undertaking costly acquisitions in recent years. It is unlikely that we have heard the last from Icahn and this could shore up the stock which has seen a correction of nearly 10% since February.

Overall, Icahn Enterprises remains a dark horse but Nuance Communications Inc. (NASDAQ:NUAN) and Transocean LTD (NYSE:RIG) are pretty good bets as Icahn has only recently picked up stakes in these companies, meaning thereby that we are likely to see more action in these stocks.