First up, the iconic luxury retailer Saks Incorporated (SKS) has entered into a merger agreement with Hudson’s Bay Company (HBC). The merger is expected to be finalized by the end of the year.
Saks Incorporated (SKS): Guru Mason Hawkins
Up 39% over 12 months, Saks Incorporated has a market cap of $2.41 billion.
The current share price is $16.05, and trades with a P/E of 57.40.
In July 2013, Hudson's Bay Company and Saks Incorporated entered into a definitive merger agreement whereby HBC will acquire Saks for $16.00 per share in an all-cash transaction valued at approximately $2.9 billion, including debt. HBC expects to achieve $100 million (Canadian) of annual synergies within three years. According to a Saks company press release, the transaction has been approved by each company's board of directors and is expected to close before the end of the calendar year.
This transaction is intended to bring together three of the retail industry's iconic brands – Hudson's Bay, Lord & Taylor and Saks Fifth Avenue – to create a leading North American retailer addressing a broad consumer spectrum across the luxury, mid-tier and outlet retail sectors.
Saks Incorporated was incorporated in 1919 as a luxury retailer offering a wide assortment of distinctive fashion apparel, shoes, accessories, jewelry, cosmetics, and gifts. Saks currently operates 46 Saks Fifth Avenue stores and 60 OFF 5TH stores. After the merger, the combined company will operate 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites.
Guru Action: As of August 9, 2013, Mason Hawkins reduced his position by 97.52%, with current shares of 431,516. He sold 12,657,009 shares at an average price of $12.87 for a gain of 24.7%.
Hawkins has averaged a gain of 59% on 27,165,415 shares bought at an average price of $10.09 per share.
AutoNation Inc. (AN): Guru Edward Lampert
Up 21% over 12 months, AutoNation has a market cap of $5.83 billion.
The current share price is $48.04, and trades with a P/E of 17.30.
AutoNation Inc. was incorporated in 1991 and is the largest automotive retailer in the U.S.
AutoNation reported that its total retail new vehicle unit sales total in July 2013 was 25,403, an increase of 17% as compared to July 2012. Same-store retail new vehicle unit sales in July 2013 were 24,195, an increase of 12% as compared to July 2012.
AutoNation’s second quarter 2013 net income from continuing operations was $90 million, or $0.73 per share, compared to adjusted net income from continuing operations of $82 million, or $0.66 per share, for the same period in the prior year, an 11% improvement on a per-share basis. On a GAAP basis, second quarter 2012 net income from continuing operations was $79 million, or $0.64 per share. 2013 second quarter revenue totaled $4.4 billion, compared to $3.9 billion in the year-ago period, an increase of 13%. AutoNation's retail new vehicle unit sales increased 11% overall and 7% on a same store basis, according to a company press release.
AutoNation’s Mike Jackson, chairman and CEO said, "We delivered double-digit growth in operating income in the second quarter, driven by year-over-year gross profit growth in all of our business sectors.”
Guru Action: As of August 12, 2013, Edward Lampert reduced his position by 1.69%, with current shares of 30,912,671. He sold at an average price of $47.98.
Lampert has averaged a gain of 199% on 106,989,483 shares bought at an average price of $16.05 per share.
His trading history shows remarkable gains over the last nine years.
ITT Educational Services Inc. (ESI): Guru Richard Blum
Down 11% over 12 months, ITT Educational Services Inc. has a market cap of $677.8 million.
The current share price is $28.99, and trades with a P/E of 5.80.
Incorporated in 1946, ITT Educational Services Inc. had an annual average earnings growth of 25.8% over the past 10 years.
The educational company provides post secondary degree programs in the U.S., offering diploma, associate, bachelor and master degree programs.
ITT Educational Services Inc. reported second quarter 2013 financial results with a 51% decrease in net income over the same quarter a year ago. The company has an 18.5% decrease in revenue as well, with $547.6 million in the current quarter compared to $671.6 million in the second quarter of 2012. ITT Educational Services Inc. (ESI) reported first quarter 2013 revenues of $287.7 million, down 15.8% from the same quarter one year ago.
Guru Action: As of August 9, 2013, Richard Bum reduced his position by 2.86%, with current shares of 3,202,944. He sold at an average price of $29.75.
Blum has averaged a loss of 59% on 4,397,887 shares bought at an average price of $71.49 per share.
FedEx Corporation (FDX): Guru Mason Hawkins
Up 24% over 12 months, FedEx has a market cap of $34.38 billion.
The current share price is $108.61, and trades with a P/E of 21.70.
FedEx Corporation was incorporated in 1997. It provides a portfolio of shipping, transportation, e-commerce and business services.
The company reported second quarter fiscal 2013 financial results with a slight decrease in net income over the same quarter a year ago, comparing the reporting quarter of $1.98 billion (non-GAAP) to $2.09 billion (non-GAPP) in the same quarter of 2012. The company had a decrease in revenue from $44.3 billion in the reporting quarter compared to $42.7 billion in the second quarter of fiscal 2012 (both non-GAAP).
Guru Action: As of August 9, 2013, Mason Hawkins reduced his position by 4.76%, with current shares of 15,807,606. He sold 354,187 shares at an average price of $97.08 for a gain of 11.9%.
Hawkins has averaged a gain of 27% on 17,746,270 shares bought at an average price of $85.64 per share.
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