Chicago has a special relationship with billionaire hedge fund investor Edward Lampert due to his position as chairman of Sears Holdings Corp. Sears, Roebuck and Company, or Sears, as a good number of you may already know, is a chain of department stores that has its headquarters in the Chicago suburbs. As such, I wasn’t surprised when the Chicago Tribune’s Sandra Jones wrote a piece last week that dissected Mr. Lampert’s investments as of the end of last quarter. Jones wrote:

ESL Investments Inc., Lampert’s Greenwich, Conn.-based hedge fund, began buying shares in credit card issuer Capital One Financial last year. The fund held 9.9 million shares, valued at $504 million, as of Sept. 30, according to documents filed with the Securities and Exchange Commission late Friday. The fund also said it bought 34.6 million shares of mortgage giant Fannie Mae, valued at $52.9 million, in the quarter ended Sept. 30.

The U.S. government took control of the Federal National Mortgage Association, known as Fannie Mae, on Sept. 7, after a wave of mortgage defaults.

Additionally, Lampert’s fund bought 550,000 shares of Hartford Financial Group Inc., worth $22.5 million, and nearly doubled his stake in CIT Group Inc., to 7.3 million shares worth $51 million, in the quarter, the filing said.

Lampert owns 52 percent of Hoffman Estates-based Sears through ESL, making it his largest equity investment. He also holds large stakes in AutoNation Inc., AutoZone Inc. and Citigroup Inc.

Source:

“Lampert takes hit on Sears holdings”
Sandra M. Jones
Chicago Tribune, November 15, 2008

Edward Lampert, who some call “The Next Warren Buffett,” has been busy buying up stocks of the nation’s largest car dealer. According to the Associated Press yesterday:

Billionaire investor Edward S. Lampert continued to buy shares of AutoNation Inc., putting nearly $1.4 million more into the nation’s largest car dealer last week.

Lampert, a former AutoNation director who was already the company’s largest shareholder, bought 228,700 shares for between $5.90 and $6.15 per share on Thursday and Friday, according to a regulatory filing.

That follows purchases of 529,000 shares for $3.2 million, announced earlier last week. Lampert-controlled entities now own more than 78.6 million shares, or nearly 44.5 percent of the Fort Lauderdale, Fla., company’s outstanding stock.

Source:

“Eddie Lampert again raises stake in AutoNation”
Associated Press, November 17, 2008

MarketWatch’s Sam Mamundi wrote this morning:

The investment vehicle of legendary investor Warren Buffett increased its stake in transport outfit Union Pacific Corp. by almost double in the second quarter.

Berkshire Hathaway also added stakes in Bank of America Corp. (BAC), Lowe’s Cos. (LOW), and NRG Energy Inc. (NRG), according to filings released this morning.

Berkshire Hathaway (BRK.A) grew its Union Pacific (UNP ) stake from 4.453 million shares at the end of the first quarter to 8.906 million at the end of the second quarter. Union Pacific stock is up 23.6% this year…

Berkshire addition of NRG Energy Inc (NRG ) totaled 3.24 million shares in the second quarter, worth $139 million. While NRG’s stock is down 18.7% this year, the energy sector is considered a good investment by money managers right now.

The two sell-offs in Berkshire’s portfolio in the recent quarter were both related to acquisition deals. Trane Inc. was sold off in an acquisition by Ingersoll-Rand Company Ltd (IR). Similarly, Berkshire eased its stake in Anheuser Busch Cos. from more than 35 million shares to less than 14 million shares in the wake of Anheuser’s merger with InBev which had yet to be consummated as of the second quarter.

MarketWatch’s Greg Morcroft also reported this morning:

Shares of Lehman Bros. Holdings Inc. rose more than 6% at one point Friday as news that famed investor George Soros’ hedge fund boosted its stake in the company brought out buyers.

An analyst report from David Trone at Fox-Pitt Kelton also lent support to the shares. He said that Lehman’s upcoming losses should be smaller than the second quarter’s as hedges in place at the firm appear to be working.

Soros Fund Management has raised its stake in Lehman Brothers (LEH) to 9.47 million common shares at the end of June 30, up from 10,000 shares at the end of March 31.

The fair market value of the stake is estimated at $187.7 million, according to a regulatory filing by the fund Thursday.

Reuters’ Karen Wutkowski noted yesterday:

Billionaire investor Eddie Lampert cut his stake in Home Depot Inc (HD.N) by 13 percent to 19.7 million shares as of June 30, according to a disclosure document for his fund RBS Partners.

The fund also increased its stake in AutoZone Inc (AZO.N) to 22.9 million shares from 22 million shares the prior quarter, according to a filing with the U.S. Securities and Exchange Commission. It cut its stake in KB Home (KBH.N) to 358,000 shares from 605,000 shares.

Sources:

“Buffett’s Berkshire doubles Union Pacific stake”
Sam Mamudi
MarketWatch, August 15, 2008

“Soros buy puts shine on Lehman shares”
Greg Morcroft
MarketWatch, August 15, 2008

“Lampert cuts Home Depot stake, ups AutoZone holdings”
Karey Wutkowski
Reuters, August 14, 2008

You may have heard by now that New York-based clothing retailer Steve & Barry’s filed for Chapter 11 bankruptcy protection yesterday. Now, the rumor is that billionaire investor and Sears Holding Corporation chairman Edward Lampert might be interested in acquiring the company. The Chicago Tribune’s Susan Chandler wrote this morning:

It made its name selling $10 pairs of athletic shoes and $8 dresses, but it turns out Steve & Barry’s wasn’t making a profit.

The fast-growing New York retailer sought Chapter 11 bankruptcy protection Wednesday, as rumors swirled that Sears Holdings Corp. might be interested in a bailout or picking up some of its brands.

A Sears spokesman declined to comment on any potential interest, and investors were clearly put off by the prospect. Sears’ shares lost almost 5 percent of their value Wednesday, falling $3.53, to $72.54 a share. But some retail experts said such an alliance could make sense for Sears Chairman Edward Lampert.

“Eddie Lampert’s apparel is in chaos. Eddie Lampert needs traffic. Eddie Lampert needs a big idea. If that’s what he needs, this is potentially a very big idea,” said Howard Davidowitz, chairman of New York retail consulting firm Davidowitz & Associates.

Photo by Roberto Tostes, stock.xchng

Lampert, sometimes called “The Next Warren Buffett,” is an old hand at picking up companies down on their luck. Chandler noted:

But Steve & Barry’s trip through bankruptcy reorganization may make the company particularly appealing to Sears’ Lampert. He picked up a bargain in the retail bankruptcy of Kmart, paying pennies on the dollar for the discount chain’s debt. He then reorganized the company, exited bankruptcy, took Kmart public again in 2003 and engineered the $12 billion takeover of Sears, Roebuck and Co. in 2005.

Source:

“Will Sears try on Steve & Barry?”
Susan Chandler
Chicago Tribune, July 10, 2008

Looks like billionaire hedge fund manager Eddie Lampert thinks the U.S. housing bust is almost over. According to the Wall Street Journal this morning, Lampert has been acquiring shares in beaten-up home builders, mortgage lenders, and a home-improvement retailer. The Journal’s Gary McWilliams wrote:

Recently, the Greenwich, Conn., hedge fund, which controls investments it valued at about $11.6 billion in its most recent government financial report, began picking up shares in hard-hit housing-related stocks. ESL acquired small stakes in U.S. home builders Centex Corp. and KB Home, according to its latest Securities and Exchange Commission filings. At recent prices, the stakes in the two home builders are valued at $10.4 million and $10.8 million, respectively.

ESL also is tip-toeing into mortgage origination and servicing, acquiring about four million shares of CIT Group Inc., a struggling subprime home and commercial lender, as well as 1.4 million shares of PHH Corp., a mortgage originator and mortgage-service company. The shares are valued currently at about $35.5 million and $25.2 million, respectively. ESL spokesman Steve Lipin declined to comment on the investments.

McWilliams also noted that Lampert, who is also the chairman of Sears Holding Corp., added to his holdings of home-improvement retailer Home Depot. His hedge fund now owns about 22.7 million shares (valued at $590 million), up from 16.7 million shares in 2007.

Source:

“Lampert Puts Money On Housing Rebound”
Gary McWilliams
Wall Street Journal, June 12, 2008

Edward Lampert, Chairman of Sears Holdings Corporation, and founder, Chairman, and CEO of ESL Investments, has acquired 40% of Florida-based AutoNation Inc., the largest American auto dealership. Reuters’ David Bailey wrote yesterday:

Billionaire investor Edward Lampert has raised his stake in AutoNation Inc the biggest U.S. auto dealership group, to about 40 percent, according to documents filed on Wednesday with federal securities regulators.

Lampert, the largest shareholder in AutoNation, disclosed the acquisition of another 396,600 shares on Tuesday in the auto dealership group, running his stake to about 71.5 million shares, held mostly through various affiliates.

Lampert, who has been called “The Next Warren Buffett,” previously served on AutoNation’s board.

Source:

“Lampert AutoNation stake reaches 40 percent”
David Bailey
Reuters, June 4, 2008

This morning, Reuters India is reporting that billionaire investor Eddie Lampert has increased his stake in AutoNation Inc., the largest American auto dealership, to nearly 40%. Lampert, AutoNation’s biggest shareholder, disclosed in federal regulatory filings that he had acquired more than 1 million shares on Friday and Tuesday through affiliates, which leaves the investor with 70.7 million shares of the Florida-based company.

The announcement comes on the heels of the disclosure by Lampert on Tuesday that he had also acquired 521,000 shares of AutoNation back on May 22.

Source:

“Lampert adds to AutoNation stake, nears 40 percent”
David Bailey
Reuters (India), May 29, 2008

Eddie Lampert, the billionaire investor known as “The Next Warren Buffett,” continues to acquire more shares of AutoNation Inc., according to Reuters yesterday. David Bailey wrote:

Billionaire investor Edward Lampert has increased his stake in AutoNation Inc the biggest U.S. auto dealership group, by more than half a million shares to about 39 percent, according to federal regulatory filings on Tuesday.

Lampert, the largest shareholder in AutoNation, acquired 521,000 shares on May 22 for prices ranging from $15.44 to $16, raising his holdings to about 69.6 million, according to filings with the U.S. Securities and Exchange Commission.

Lampert, who is also the chairman of Sears Holding Corp, previously served on AutoNation’s board.

Source:

“Lampert adds more to his AutoNation stake”
David Bailey
Reuters, May 28, 2008

According to recent regulatory filings, Eddie Lampert, billionaire investor and chairman of Sears Holdings Corporation, has been steadily increasing his stake in the largest U.S. auto dealership group and auto parts retailer. Reuters reported this past Tuesday that Lampert has increased his holdings of AutoNation, the biggest U.S. auto dealership group, to just under 39%. Lampert, who is the largest shareholder of AutoNation, disclosed the acquisition of an additional 145,600 shares on May 16 in filings with the U.S. Securities & Exchanges Commission.

The investor, who is often referred to as “The Next Warren Buffet,” has also been actively acquiring stock of AutoZone, the largest U.S. auto parts retailer. According to Reuters on May 20, Lampert has increased his stake in the Memphis, Tennessee-based company from around 31% to just over 36% recently.

Sources:

“Lampert ups stake in AutoNation to 39 pct”
Soyoung Kim
Reuters, May 20, 2008

“CORRECTED - UPDATE 1-AutoZone earnings rise, stock up”
Christopher Kaufman, Kevin Krolicki
Reuters, May 20, 2008

While earlier this week I noted that billionaire investor Edward Lampert’s hedge fund ESL Partners LP has been actively increasing its stake in auto-retailer AutoNation Inc., Reuters shed some light on another fund of his, RBS Partners. Lampert reported the fund’s holdings as of March 31 in a filing with the U.S. Securities and Exchange Commission, which revealed RBS has a 6 million share stake in Sallie Mae, the largest U.S. student loan company.

In addition, Reuters’ Karey Wutkowski reported that the fund also owns stakes in commercial lender CIT Group Inc (3.9 million shares), mortgage and vehicle fleet company PHH Corp (1.4 million shares), and two home builders, Centex Corp (747,500 shares) and KB Home (605,000 shares).

Source:

“Lampert reports 6 mln share stake in Sallie Mae”
Karey Wutkowski
Reuters, May 15, 2008