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Is AutoNation, Inc. (AN) Going to Burn These Hedge Funds?

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In the financial world, there are many indicators investors can use to monitor stocks. Two of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outclass the S&P 500 by a significant amount (see just how much).

Equally as useful, bullish insider trading sentiment is another way to analyze the investments you’re interested in. Just as you’d expect, there are a variety of reasons for an insider to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know where to look (learn more here).

What’s more, it’s important to analyze the recent info about AutoNation, Inc. (NYSE:AN).

AutoNation, Inc. (NYSE:AN)

What does the smart money think about AutoNation, Inc. (NYSE:AN)?

At the end of the second quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 30% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.

When using filings from the hedgies we track, Edward Lampert’s ESL Investments had the most valuable position in AutoNation, Inc. (NYSE:AN), worth close to $879.5 million, comprising 29.4% of its total 13F portfolio. Coming in second is Murray Stahl of Horizon Asset Management, with a $268.1 million position; 3.9% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Daniel S. Och’s OZ Management, James Crichton and Adam Weiss’s Scout Capital Management and John Armitage’s Egerton Capital Limited.

Now, specific money managers were breaking ground themselves. ESL Investments, managed by Edward Lampert, assembled the most valuable position in AutoNation, Inc. (NYSE:AN). ESL Investments had 879.5 million invested in the company at the end of the quarter. Murray Stahl’s Horizon Asset Management also initiated a $268.1 million position during the quarter. The other funds with new positions in the stock are Daniel S. Och’s OZ Management, James Crichton and Adam Weiss’s Scout Capital Management, and John Armitage’s Egerton Capital Limited.

How have insiders been trading AutoNation, Inc. (NYSE:AN)?

Insider buying made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, AutoNation, Inc. (NYSE:AN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators 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). All of these stocks are in the auto dealerships industry and their market caps are closest to AN’s market cap.

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