Eddie Lampert has been taking profits from his beautifully performing AutoZone (AZO, Financial) holding for several months. But with only one small add this year, it appears he is on his way to selling out. His 7,448,970 shares as of Oct. 21, 2010, is less than one third of the 22,006,790 shares he owned in the fourth quarter of 2006. Lampert bought AutoZone shares in the late 90s, when it traded for around $30, meaning he has made over a 1,000% return on this single holding. In October alone, Lampert has made five sales ranging from 2.14% to 3.08% of his total AutoZone shares. If he sold approximately 1.1 million shares total in October, he made an estimated profit of $358.7 million.
He made many more sales in the preceding months of 2011 during the stock’s 21% year-to-date tear from $272.59 to $330.19 a share.
AutoZone has enjoyed strong results, capable management and a favorable economic picture. Net sales were $2.6 billion for the sixteen weeks ended Aug. 27, 2011, an 8.1% year over year increase. For the year ended August 27, sales increased 9.6% to $8.1 billion, a company record, compared to last year. The company also achieved several other records in fiscal 2011: It grew fiscal year EBIT margin 18.5% and exceeded 30% return on invested capital, ending the year at 31.3%.
Squeezed consumers are meaning good business for lower-priced retailers, particularly in the car repair industry. Nearly 80% of respondents to a national survey released July 7 said they planned to drive their vehicle for up to or over 50,000 miles more than their previous vehicle. Sixty percent of respondents said they planned to put over 50,000 more miles on their current vehicle than they did on their previous vehicle, up from 68% last year.
"With better built vehicles able to sustain longer lives on the road, and new access to robust online repair information, we are not surprised that car owners continue to hold onto their current vehicles for miles longer than before, and that many of those who plan to buy a vehicle are opting out of purchasing a service contract and plan to either do their own repairs or visit their local repair shop instead," said Brian Hafer, VP of Marketing for AutoMD.com, the firm that conducted the survey.
Total light vehicle sales in the U.S. increased 10.4% from the period of Jan. 1 to Sept. 30, 2011, compared to the same period of last year.
Lampert became a director of AutoZone in 1999, when he owned 15% of the company and it traded around $20-$30. He resigned from the board in 2006, and was replaced with Ted Ullyot, his firm’s executive vice president and general counsel. In 2008, AutoZone allowed Lampert’s firm to add two more board members of their choosing. Also that year, Lampert used his influence as 36.2% owner to push for an agreement that the company achieve at least the new 2.5x adjusted debt/EBITDAR leverage metric (increased from the previously established 2.1x) by the end of their second quarter 2009 in order to optimize its capital structure and highlight the strength of its free cash flow generation.
In the second quarter of 2011, Lampert picked one financial to add to his concentrated portfolio of 11 stocks, Wells Fargo (WFC, Financial). He bought 4,627,994 shares at an average price of $28.41. The price has slid 7.4% since then.
He made many more sales in the preceding months of 2011 during the stock’s 21% year-to-date tear from $272.59 to $330.19 a share.
AutoZone has enjoyed strong results, capable management and a favorable economic picture. Net sales were $2.6 billion for the sixteen weeks ended Aug. 27, 2011, an 8.1% year over year increase. For the year ended August 27, sales increased 9.6% to $8.1 billion, a company record, compared to last year. The company also achieved several other records in fiscal 2011: It grew fiscal year EBIT margin 18.5% and exceeded 30% return on invested capital, ending the year at 31.3%.
Squeezed consumers are meaning good business for lower-priced retailers, particularly in the car repair industry. Nearly 80% of respondents to a national survey released July 7 said they planned to drive their vehicle for up to or over 50,000 miles more than their previous vehicle. Sixty percent of respondents said they planned to put over 50,000 more miles on their current vehicle than they did on their previous vehicle, up from 68% last year.
"With better built vehicles able to sustain longer lives on the road, and new access to robust online repair information, we are not surprised that car owners continue to hold onto their current vehicles for miles longer than before, and that many of those who plan to buy a vehicle are opting out of purchasing a service contract and plan to either do their own repairs or visit their local repair shop instead," said Brian Hafer, VP of Marketing for AutoMD.com, the firm that conducted the survey.
Total light vehicle sales in the U.S. increased 10.4% from the period of Jan. 1 to Sept. 30, 2011, compared to the same period of last year.
Lampert became a director of AutoZone in 1999, when he owned 15% of the company and it traded around $20-$30. He resigned from the board in 2006, and was replaced with Ted Ullyot, his firm’s executive vice president and general counsel. In 2008, AutoZone allowed Lampert’s firm to add two more board members of their choosing. Also that year, Lampert used his influence as 36.2% owner to push for an agreement that the company achieve at least the new 2.5x adjusted debt/EBITDAR leverage metric (increased from the previously established 2.1x) by the end of their second quarter 2009 in order to optimize its capital structure and highlight the strength of its free cash flow generation.
In the second quarter of 2011, Lampert picked one financial to add to his concentrated portfolio of 11 stocks, Wells Fargo (WFC, Financial). He bought 4,627,994 shares at an average price of $28.41. The price has slid 7.4% since then.
