LionEye Ups Activist Stake in Asbury Automotive Group, Inc. (ABG) to Over 6%

In a recent filing with the US Securities and Exchange Commission, Stephen V. Raneri‘s LionEye Capital Management disclosed increasing its stake in Asbury Automotive Group, Inc. (NYSE:ABG). LionEye revealed ownership of approximately 1.89 million shares of Asbury, up from from around 1.02 million held as of the end of June and reported in the fund’s latest 13F filing. The new stake is activist by nature and amasses 6.2% of the company’s outstanding common stock.

Asbury Automotive Group, Inc. (NYSE:ABG) is a $2.0 billion market cap company that operates almost 100 franchises for automotive retailing. Aside from Mr. Ranieri, who upped his fund’s stake by a sevenfold during the second quarter, Larry Robbins‘ Glenview Capital initiated a stake in the company during the same period and revealed ownership of 920,900 shares in its latest 13F filing. On the other hand, Ricky Sandler‘s Eminence Capital trimmed its in Asbury Automotive Group, Inc. (NYSE:ABG) stake by 2% during the April-June period down to 2.12 million shares.

Asbury Automotive Group, Inc. (NYSE:ABG) represents a good investment opportunity. The stock gained around 27% since the beginning of the year, and has been growing over the past several years. Asbury trails a solid P/E of around 17.50, which is slightly below the industry average of 18.70. The company also beat the analyst estimates in terms of revenue and profit over the past several quarters. For the second quarter the company posted Earnings per Share of $1.19, which is above the consensus estimate of $1.00, and significantly above the second-quarter of 2013 result of $0.88. The revenue of the company also went up by 12% on the year to around $1.5 billion.

In addition, earlier in July, Asbury Automotive Group, Inc. (NYSE:ABG) reported that its Board approved to increase the share repurchase authorization to $100 million. During the first six months the company bought back 503,000 shares, worth around $29.4 million.

Disclosure: none