Eddie Lampert's ESL Investments
has long held Autozone (AZO)
as a major part of its portfolio. The fund ended the second quarter of 2008 with 22,884,692 shares in the company – the average share price at the time was $121.65. When the average share price of AZO fell to $115.19, ESL increased its stake in the company by another 485,605 shares, bringing the total number of its shares to 23,370,297.
The move may have turned out to be one of Lampert's best ever.
By the second quarter of 2009, the average sale price of AZO was $158.64. Lampert sold 2,457,430 shares, profitting roughly 30% over the price of his earlier buy-ins. Since that quarter, the average share price in AZO kept increasing and Lampert kept selling. By the end of the first quarter 2011, AZO's average share price was $259.72 a share and Lampert had 10,574,406 shares left in the company. When the average share price of AZO swelled to $285.57 in the second quarter, Lampert sold 1,115,104 shares. Then, the next quarter, AZO's average share price jumped to $302.32 a share, and Lampert sold another 533,571 shares – looking back it seems like small potatoes.
At the end of the third quarter, Lampert's ESL had 8,925,551 shares in the company and the share price of AZO was swelling, ultimately reaching a high of $343.90 on December 6. The whole time, Lampert was cashing in parts of his stake in the company. And, now that the stock appears to have crested – AZO was trading at $328.72 a share as of 2pm EST today – Lampert has been selling even more shares in AZO. Today, his ESL owns just 5,237,051 shares in AZO and his fund has made millions on the venture.