A recent Form 13D filing by Eddie Lampert reveals that his beneficial holding in AutoNation, Inc. (NYSE:AN) has fallen to 19.2%.Eddie Lampert Trims Holdings In AutoNation, Inc. (AN)

 

He beneficially now owns 22.81 million shares in the USA’s largest automotive retailer, which boasts of 273 new vehicle franchises that sell 33 new vehicle brands over 15 states.

Holdings down from June

A 13D filing in June showed he held 26.20 million shares in AutoNation, Inc. (NYSE:AN) amounting to a 21.9% stake.

At one time Lampert had a massive holding of 80 million shares in the auto retailer, but has been steadily selling out the stock since the first quarter of 2010. It has been a hugely successful investment for Lampert – tripling in value since 2009.

AutoNation performance

AutoNation, Inc. (NYSE:AN) is up 7.31% year to date, and up 11.32% over the past 12 months. However the stock lost nearly 11% this past month.

Last month analysts at UBS rated the stock as a Sell with a price target of $43, though the company reported sales of 25,450 new vehicles during the month of June 2014. This was the best June month since 2007. Goldman Sachs, however, upgraded the stock to a Buy rating last month and has a price target of $65.

For the second quarter, the company reported EPS of $0.83 and revenue of $4.8 billion. The EPS reported was the highest ever for the second quarter, and it was the 15th straight quarter of double-digit year-on-year growth in EPS.

However, the number missed market expectations by $0.04, resulting in weakness in the stock price.

AutoNation, Inc.(NYSE:AN) will report third quarter earnings on October 22. Analysts expect EPS of $0.86 and revenue of $4.74 billion.

Motives for selling

It is likely that Lampert is selling into strength and booking profits steadily. Last year, he distributed $393 million worth of his AutoNation, Inc.(NYSE:AN) holdings to clients looking to redeem out of his hedge fund that has a substantial stake in struggling retailer Sears Holdings Corp(NASDAQ:SHLD).

This means that the weightage of Sears Holdings Corp (NASDAQ:SHLD) in Lampert’s basket is steadily growing – perhaps not a healthy sign given that the retailer’s last five quarters have all generated net losses.