AutoNation, Inc. (AN): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

Is AutoNation, Inc. (NYSE:AN) a buy right now? Investors who are in the know are betting on the stock. The number of long hedge fund bets went up by eight lately. AN was in 34 hedge funds’ portfolios at the end of the third quarter of 2013. There were 26 hedge funds in hedge fund experts Insider Monkey’s database with AN positions at the end of the previous quarter.

AutoNation, Inc. (NYSE:AN)

The company reported some good news for investors recently, announcing that total retail new vehicle unit sales in November 2013, as reported to the applicable automotive manufacturers, were 25,454, an increase of 13% as compared to November 2012.

Now, we’re going to take a look at the key action regarding AutoNation, Inc. (NYSE:AN).

What have hedge funds been doing with AutoNation, Inc. (NYSE:AN)?

Heading into Q4, a total of 34 of the hedge funds Insider Monkey tracks were long in this stock, a change of 31 percent from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies followed by Insider Monkey, Edward Lampert’s ESL Investments had the largest position in AutoNation, Inc. (NYSE:AN), worth close to $1.0144 billion, accounting for 29.2 percent of its total 13F portfolio. The second largest stake is held by Horizon Asset Management, led by Murray Stahl, holding a $317.1 million position; 4.3 percent of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions comprise Daniel S. Och’s OZ Management, James Crichton and Adam Weiss’s Scout Capital Management and Michael Larson’s Bill & Melinda Gates Foundation Trust.

Consequently, some big names have jumped into AutoNation, Inc. (NYSE:AN) headfirst. Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, established the most outsized position in AutoNation, Inc. (NYSE:AN). Scopia Capital had 96.8 million invested in the company at the end of the quarter. Ricky Sandler’s Eminence Capital also initiated a $72.5 million position during the quarter. The other funds with brand new AN positions are Rob Butts and Josh Clark’s Southpoint Capital Advisors, Charles Clough’s Clough Capital Partners, and Paul Orlin and Alex Porter’s Amici Capital.

Insider trading activity in AutoNation, Inc. (NYSE:AN)

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time period, AutoNation, Inc. (NYSE:AN) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to AutoNation, Inc. (NYSE:AN). These stocks are Sonic Automotive Inc (NYSE:SAH), KAR Auction Services Inc (NYSE:KAR), CarMax, Inc (NYSE:KMX), Penske Automotive Group, Inc. (NYSE:PAG), and Copart, Inc. (NASDAQ:CPRT). This group of stocks belong to the auto dealerships industry and their market caps match AN’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Sonic Automotive Inc (NYSE:SAH) 16 0 0
KAR Auction Services Inc (NYSE:KAR) 46 0 21
CarMax, Inc (NYSE:KMX) 26 0 0
Penske Automotive Group, Inc. (NYSE:PAG) 19 0 4
Copart, Inc. (NASDAQ:CPRT) 39 2 3

AutoNation, Inc. is the third most widely held auto dealerships industry stock in the portfolios of the hedge funds Insider Monkey tracks.


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