Eddie Lampert increases AutoNation stake to 37.9%

"Billionaire investor Edward Lampert has raised his stake in AutoNation Inc (AN), the No. 1 U.S. auto dealership group, to nearly 38 percent, according to federal regulatory filings.

Lampert, who is also chairman of Sears Holdings Corp (SHLD), bought 383,500 shares on April 30 for prices ranging from $15.89 to $16 per share, raising holdings under his control to about 67.6 million shares."-Stock Article Link

Personally I don't see the attraction to this stock. It's high in debt, low in ROE....time to read the transcript and see if I can find anything interesting...Earning Transcript Link

Recent Insider Buys

30-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 344,113 Indirect Purchase at $15.89 - $16 per share. $5,487,0002

30-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 39,387 Indirect Purchase at $15.98 - $16 per share. $630,0002

29-Apr-08 MIGOYA CARLOS A
Director 5,000 Direct Purchase at $16.17 per share. $80,850

29-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 234,033 Indirect Purchase at $15.89 - $16 per share. $3,732,0002

29-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 5,967 Indirect Purchase at $15.89 - $15.98 per share. $95,0002

28-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 190,056 Indirect Purchase at $15.62 - $16 per share. $3,005,0002

28-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 61,432 Indirect Purchase at $15.81 - $16 per share. $977,0002

28-Apr-08 LAMPERT EDWARD S
Beneficial Owner (10% or more) 120,565 Indirect Purchase at $15.62 - $15.99 per share. $1,906,0002

Eddie Lampert continues his AutoNation appetite

Investing guru Edward Lampert has raised his stake in AutoNation again, bringing it up to 31 percent, a Thursday Securities and Exchange filing showed.

Lampert's hedge fund, ESL Investments, and related parties currently own 58.8 million shares in the Fort Lauderdale-based auto retailer, up from 55.3 million shares reported on Nov. 27.

Insider Transactions

AutoNation (AN), the largest U.S. retail auto dealer, owns and operates about 325 new
vehicle franchises in 16 states. Car retailing is a very competitive and cyclical business. With razor-thin profit margins (AutoNation is below 2%), highly leveraged inventories that depreciate rapidly, dealers must generate high volume and fast turnover. If you look at the history of AutoNation's return on equity, it's below 10% most of the time (we prefer 15% or better). -Link

Positives
-Based on the 10 year history, AutoNation has never sold below book value, currently at $18.90 book value and the stock is trading at $15.15.
-Incredible share buyback...back in 1997, it was 432 million...now it's only 183.96 million ! -Link

Negatives
-Debt/Equity is normally around 20% but currently it's 108%. Maybe it's using more debt to buy back stock. The current ratio is still the norm at around 1.00.