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Savant Edward Lampert, Top Six Holdings - Great Gains Despite One Bad Apple

Sally Jones

Sally Jones

49 followers
Here’s a look at the portfolio of investing Guru Edward Lampert, Number 68 on the Forbes list of 400 Richest Americans. Lampert wears multiple crowns as the founder of his own hedge fund ESL Investments and as the Chairman and CEO of Sears Holdings. Lampert’s reputation as a savant investor and creative mastermind has grown to near-mythic proportion. With super-gains like his top positions reveal, Lampert can afford one bad apple in the “Orchard.” Lampert is the matchmaker behind the Sears and Kmart union, which ultimately produced two spin-offs Sears Hometown & Outlet Stores, and the problem child, Orchard Supply Hardware. The ESL Investments portfolio is heavily weighted with consumer cyclical, reflecting that Guru Lampert reads the pulse of the people, how we live, what we drive, and what we wear.

Here are Edward Lampert’s top six holdings:

No. 1: Sears Holdings Corporation (SHLD), Weighting: 39.2%, Shares Owned: 36,334,181, Value: $1.5 billion

Director and 10% owner Edward S. Lampert holds 36,334,181 shares of Sears Holdings Corporation (SHLD), representing 39.2% of his portfolio. Lampert’s trading history with Sears Holdings shows a rough ride since third quarter of 2008. Since that time, he has averaged a share price of $77.46 per share with a loss of 33% on 385,182 shares. With 29,690,185 shares sold, Lampert’s average price was $73.01 per share with a 29% loss.

His holding history:



Up 2% over 12 months, Sears Holdings Corporation (SHLD) is a Delaware corporation with a market cap of $5.49 billion; its shares were traded at around $52.54 with and P/S ratio of 0.14.

In March Sears Holding reported a loss of $489 million with a six-month trend of declining sales. The company reported an adjusted EBITDA of $429 million for the fourth quarter of 2012 and $626 million for the year, which were both in line with guidance. The adjusted EBITDA for the prior year fourth quarter and year were $351 million and $277 million, respectively. Sears Holdings saw its gross margin rate increase 130 basis points for the fourth quarter of 2012 and 90 basis points for the year from the comparable prior year periods.

The GuruFocus Interactive Valuation chart tells the Sears story graphically:

1367952169391.pngSHLD data by GuruFocus.com

No. 2: AutoNation Inc. (AN), Weighting: 35.8%, Shares Owned: 34,617,370, Value: $1.37 billion

Edward S. Lampert holds 34,617,370 shares of AutoNation Inc. (AN), representing 35.8% of his portfolio. Lampert’s trading history with Sears Holding shows major gains since the second quarter of 2008. Since that time, he has averaged a share price of $12.26 per share with a gain of 269% on 13,097,719 shares. With 45,104,464 shares sold, Lampert’s average price was $31.48 per share with a 44% gain.

His holding history:



Up 32% over 12 months, AutoNation, Inc. reported this week that its retail new vehicle unit sales total in April 2013 was up by 10% as compared to April 2012. The company also sells around 11% of the Mercedes-Benz vehicles in the U.S.

AutoNation was incorporated in Delaware in 1991. The company has a market cap of $5.47 billion; its shares were traded at around $45.60 with a P/E ratio of 17.10 and a P/S ratio of 0.40.

The GuruFocus Interactive Valuation chart tells the AutoNation story across 10 years:

1367952933711.pngAN data by GuruFocus.com

No. 3: Gap, Inc. (GPS), Weighting: 11.6%, Shares Owned: 14,320,977, Value: $444 million

Lampert also holds 14,320,977 shares of Gap Inc. (GPS), representing 11.6% of his portfolio. Lampert’s trading history with Gap shows remarkable gains since the fourth quarter of 2010. Since that time, his average cost on shares bought and sold is $7 per share with a 449% gain.



Up 37% over 12 months, Gap, Inc. was incorporated in California in July 1969 and was reincorporated as a Delaware corporation in May 1988. Gap, Inc. has a market cap of $17.5 billion; its shares were traded at around $38.86 with a P/E ratio of 16.60 and P/S ratio of 1.20. The dividend yield of Gap, Inc. stocks is 1.40%. Gap, Inc. had an annual average earnings growth of 8% over the past 10 years.

1367953332912.pngGPS data by GuruFocus.com

Gap Inc.’s fiscal year 2012 results showed net sales for the 53 weeks ended February 2, 2013, were $15.7 billion compared with net sales of $14.5 billion for the 52 weeks ended January 28, 2012. The company’s fiscal year 2012 comparable sales were up 5% compared with a 4% decrease last year.

For the 53 weeks ended February 2, 2013, the company reported net income of $1.1 billion, or $2.33 per share on a diluted basis, compared with net income of $833 million, or $1.56 per share on a diluted basis, for the 52 weeks ended January 28, 2012.

Gap Inc. also reported comparable sales for the fourth quarter of fiscal year 2012 as follows:

Gap North America: positive 4% versus negative 3% last year

Banana Republic North America: positive 3% versus flat last year

Old Navy North America: positive 8% versus negative 6% last year

International: negative 2% versus negative 8% last year

No. 4: Sears Hometown & Outlet Stores Inc. (SHOS), Weighting: 7.7%, Shares Owned: 9,086,583, Value: $295 million

Edward Lampert also holds 9,086,583 shares of Sears Hometown & Outlet Stores Inc. (SHOS), representing 7.7% of his portfolio. Lampert’s trading history with SHOS shows that he bought one time in the fourth quarter of 2012, at an average cost of $32 per share on 9, 086,583 shares, for a gain of 43%.

Up 49% over twelve months, Sears Hometown & Outlet Stores Inc. was incorporated in Delaware on April 23, 2012. Sears Hometown has a market cap of $924.2 million; its shares were traded at around $45.29.

The GuruFocus Interactive Valuation chart shows the fluctuations in SHOS share price over 10 years:

1367953770232.pngSHOS data by GuruFocus.com

No. 5: Genworth Financial Inc. (GNW), Weighting: 2.4%, Shares Owned: 12,083,481, Value: $90.7 million

Edward Lampert also holds 12,083,481 shares of Genworth Financial Inc. (GNW), representing 2.4% of his portfolio. Lampert’s trading history with GNW shows major gains since he first bought in the fourth quarter of 2008. Since that time, Lampert’s average cost on over 12 million shares bought and sold is $3 per share with a 258% gain.



Up 85% over 12 months, Genworth Financial, Inc. was incorporated in Delaware in 2003 in preparation for its corporate reorganization and an initial public offering of its common stock, which was completed on May 28, 2004. Genworth Financial Inc. has a market cap of $5.22 billion; its shares were traded at around $10.88 with a P/E ratio of 13.80 and a P/S ratio of 0.53.

Here’s the Genworth valuations over 10 years:

1367954633715.pngGNW data by GuruFocus.com

A week ago Genworth Financial, Inc. reported results for the first quarter of 2013 with a net income of $103 million, or $0.21 per diluted share, compared with net income of $46 million, or $0.09 per diluted share, in the first quarter of 2012. Net operating income for the first quarter of 2013 was $151 million, or $0.30 per diluted share, compared with net operating income of $17 million, or $0.03 per diluted share, in the first quarter of 2012.

No. 6: Capital One Financial Corp (COF), Weighting: 1.3%, Shares Owned: 845,093, Value: $48.9 million

Edward Lampert also holds 845,093 shares of Capital One Financial Corp. (COF), representing 1.3% of his portfolio. Lampert’s trading history with COF shows major gains since he first bought in the second quarter of 2008. Since that time, Lampert’s average cost on over 2 million shares bought is $26.94 per share with a 119% gain. Selling over 10 million shares in that same period, Lampert’s average price was $46.40 per share, with a gain of 27%.



Up 9% over 12 months, Capital One Financial Corporation was incorporated in Delaware on July 21, 1994. The company has a market cap of $34.18 billion; its shares were traded at around $59.33 with a P/E ratio of 11 and P/S ratio of 1.56. The dividend yield of Capital One Financial Corp stocks is 0.30%. Capital One Financial Corp had an annual average earnings growth of 47.3% over the past 5 years.

In April, Capital One Financial Corporation reported a net income for the first quarter of 2013 of $1.1 billion, or $1.79 per diluted common share, compared with net income of $843 million, or $1.41 per diluted common share, for the fourth quarter of 2012, and net income of $1.4 billion, or $2.72 per diluted common share, for the first quarter of 2012. The company said that without the impact of a bargain purchase gain related to the ING Direct acquisition, first quarter 2012 net income would have been $809 million, or $1.56 per diluted common share.

Here’s a look at COF valuation changes over 10 years:

1367955215399.pngCOF data by GuruFocus.com

Edward Lampert’s company ESL Investments has a portfolio of 11 stocks with a value of $3.8 billion and a quarter-over-quarter turnover of 8%. Lampert’s portfolio is heavily weighted in consumer cyclical at 94.6%.

Guru Edward Lampert's top buys, sells, and holdings:



Here is the complete portfolio of Edward Lampert.

Also check out:

1. Edward Lampert's Undervalued Stocks

2. Edward Lampert's Top Growth Companies

3. Edward Lampert's High Yield stocks

4. Stocks that Edward Lampert keeps buying

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 2.7/5 (7 votes)

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