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

The Associated Press reported this morning that billionaire investor and Sears Holdings Corp. Chairman Edward Lampert continues to amass shares of auto retailer AutoNation Inc., according to a Securities and Exchange Commission filing from Tuesday.

Lampert’s holdings in the Florida-based company now amount to 69.1 million shares, or a 38.7% stake. In open market purchases between April 28 and last Friday, ESL Partners LP (Lampert’s hedge fund) bought 1.8 million shares for $29.2 million of working capital. At the same time, an affiliated account acquired 390,000 shares for $6.2 million, also using working capital. Lampert previously served on AutoNation’s board.

According to the Associated Press, the auto retailer continues to struggle with slowing vehicle sales in California, Florida, and other states hit hard by the downturn in the U.S. housing market. At the end of April, AutoNation reported that first-quarter earnings dropped 37%.

Source:

“Sears Chairman Lampert boosts AutoNation stake”
Associated Press, May 13, 2008

Yesterday, the Associated Press reported that billionaire investor Eddie Lampert has increased his stake in AutoZone Inc. to 36.2%, according to a Securities and Exchange Commission filing Tuesday.

The Sears Holdings Corporation Chairman now owns around 22.9 million shares of the auto parts retailer through his hedge fund, ESL Investments.

Source:

“Edward Lampert raises AutoZone stake to 36.2 percent”
Associated Press, April 15, 2008

As Investorazzi.com noted back on March 5 and March 13, billionaire investor and Sears Holdings Corp. Chairman Edward Lampert has been acquiring shares of auto retailer AutoNation. Patrick Danner of the Miami Herald speculated yesterday on Lampert’s possible intentions with the car business, and wrote:

Lampert is actually a longtime AutoNation shareholder and former board member. But his prodigious buying of AutoNation shares over the last five months has fueled speculation — and raised this question: does he see the nation’s largest dealership group as just another good buy, or does he want to take the wheel?

Danner quoted David Whiston, a Morningstar analyst who follows AutoNation. Whiston said:

A lot of people are wondering that. I don’t think he’s interested in acquiring the company outright… Eddie Lampert knows good businesses and he sees a stock that has gotten pounded.

Whiston pegs AutoNation’s fair value at $21 a share (AutoNation’s shares closed Friday at $14.65, which is up from a nearly five-year low of $12.30 set in January 2008). Danner also talked to Sham Gad, managing partner of Atlanta-based Gad Partners, who wrote about Lampert for Motley Fool recently. Gad said, “To me, he [Lampert] just sees it as a cheap stock.”

However, the Miami Herald reporter also spoke to California money manager and Lampert follower Mohnish Pabrai, who said:

His stake is one that would lead me to believe he may be open to owning the whole thing.

Yet, Whiston asked:

If he was going to [acquire AutoNation], why wouldn’t he have done that already? ESL has the resources if it wanted to make an offer.

ESL Partners LP, Lampert’s hedge fund, is reported to have $17.5 billion under management. If Lampert were going for the “full monty,” it’s possible he may be hindered by ongoing woes at Sears (acquired 2005) and Kmart (brought out of bankruptcy 2003). Sham Gad told the Herald, “He’s got his hands full with Sears.” As a result, Mohnish Pabrai speculated Lampert may continue to “nibble” at AutoNation by buying shares on the open market rather than making an offer that would carry a premium.

Source:

“Does big buyer want to drive?”
Patrick Danner
Miami Herald, March 30, 2008

The Associated Press reported today that billionaire investor and Sears Holdings Corp. Chairman Edward Lampert increased his stake in auto retailer AutoNation Inc. to 37.2%, according to a Securities and Exchange Commission filing. A little over a week ago on Wednesday, March 5, I wrote that Lampert, through his hedge fund ESL Partners LP, had acquired a 36% stake in the largest U.S. automobile dealership. According to today’s AP piece:

Lampert has steadily accumulated AutoNation shares as the company’s stock has plunged on slow vehicle sales and economic worries.

In open market purchases between last Friday and Tuesday, ESL Partners LP purchased about 1.7 million shares of the Florida-based company for around $24.1 million using working capital. During that same time period, an affiliate acquired 327,152 shares for around $4.6 million, also using working capital. Lampert used to serve on AutoNation’s board until last May, when he stepped down to concentrate on his hedge fund and Sears.

Source:

“Edward Lampert Raises AutoNation Stake”
Associated Press, March 13, 2008

This evening, Reuters reported that hedge fund manager and billionaire investor Edward Lampert has increased his stake in AutoNation to 36%, according to a regulatory filing from Wednesday. Reuters reporter Karey Wutkowski wrote that Lampert “has been slowly building his stake in the largest U.S. automobile dealership.” Lampert’s fund, ESL Partners LP, bought 1.84 million shares on the open market on February 28 and 29, and once again on March 3, for an average price of $14.79, according to a filing with the U.S. Securities and Exchange Commission.

Source:

“Lampert stake in AutoNation up to 36 pct—filing”
Karey Wutkowski
Reuters, March 5, 2008

Welcome to Investorazzi.com, a new financial weblog that tracks the investment activities of the world’s greatest investors. At the present time, the list of legendary investors includes:

• Tom Barrack, “The World’s Greatest Real Estate Investor”
• Warren Buffett, “The Oracle of Omaha”
• Jeremy Grantham
• Bill Gross, “The King of Bonds”
• Eddie Lampert, “The Next Warren Buffett”
• T. Boone Pickens, Jr., “The Oracle of Oil”
• Jim Rogers
• George Soros, “The Man Who Broke the Bank of England”

See “The Investors” page for more information about these investment legends.

My name is Christopher E. Hill, and I am the creator and editor of this blog. As an independent financial research analyst based out of Chicago, Illinois, I came up with the idea for Investorazzi.com during the 2007 holiday season. Using the Internet and other resources, I will attempt to shadow these legendary investors, much like the dreaded paparazzi and their celebrity targets. Which is, by the way, how the weblog got its name.

The word “paparazzi” is derived from a character in the Fellini film La Dolce Vita. The character, a photographer named Paparazzo, reminded Fellini of “a buzzing insect, hovering, darting, stinging.”

-Source: Howstuffworks

As the creator and editor of Boom2Bust.com, “The Most Hated Blog On Wall Street,” I’ve had prior blogging experience. Boom2Bust is an independent financial blog that seeks to warn and educate readers about a coming U.S. financial crash. Making its debut over the 2007 Memorial Day Weekend, material from Boom2Bust appears regularly on Reuters.com (over 100 posts) and has featured in the online editions of the Wall Street Journal, Fox Business, Chicago Sun-Times, West Orlando News, and Palm Beach Post.

I hope you enjoy reading Investorazzi.com. Please do not hesitate to contact me with any suggestions for improving this blog.

Sincerely,

Christopher E. Hill
Editor
editor(AT)investorazzi(DOT)com