Empyrean Capital Partners LP Takes Position in Lithia Motors, Inc. $LAD

Key Points

• Empyrean Capital Partners disclosed a new stake in Lithia Motors, buying 15,400 shares worth about $5.1 million in the fourth quarter.
• Lithia Motors reported better-than-expected quarterly results, with EPS of $7.34 versus $7.06 expected and revenue of $9.27 billion, while also raising its quarterly dividend to $0.57 per share.
• The company also approved a $500 million share buyback, and analysts currently have a consensus rating of Moderate Buy with an average price target of $368.11.

Empyrean Capital Partners LP bought a new stake in Lithia Motors, Inc. (NYSE:LAD - Free Report) in the 4th quarter, according to its most recent 13F filing with the SEC. The firm bought 15,400 shares of the company's stock, valued at approximately $5,118,000. Empyrean Capital Partners LP owned 0.06% of Lithia Motors at the end of the most recent reporting period.

Several other large investors also recently made changes to their positions in the company. Parallel Advisors LLC grew its stake in shares of Lithia Motors by 26.8% in the 4th quarter. Parallel Advisors LLC now owns 156 shares of the company's stock valued at $52,000 after buying an additional 33 shares during the period. GAMMA Investing LLC boosted its stake in Lithia Motors by 9.2% during the 4th quarter. GAMMA Investing LLC now owns 403 shares of the company's stock valued at $134,000 after purchasing an additional 34 shares during the last quarter. Vident Advisory LLC boosted its stake in Lithia Motors by 4.6% during the 2nd quarter. Vident Advisory LLC now owns 842 shares of the company's stock valued at $285,000 after purchasing an additional 37 shares during the last quarter. Blair William & Co. IL boosted its stake in Lithia Motors by 7.2% during the 4th quarter. Blair William & Co. IL now owns 716 shares of the company's stock valued at $238,000 after purchasing an additional 48 shares during the last quarter. Finally, Clearstead Advisors LLC boosted its stake in Lithia Motors by 111.4% during the 4th quarter. Clearstead Advisors LLC now owns 93 shares of the company's stock valued at $31,000 after purchasing an additional 49 shares during the last quarter.

Lithia Motors Stock Performance

LAD stock opened at $292.60 on Thursday. The company has a quick ratio of 0.24, a current ratio of 0.99 and a debt-to-equity ratio of 1.41. The firm has a market cap of $6.67 billion, a PE ratio of 10.27, a P/E/G ratio of 0.68 and a beta of 1.26. The business has a 50 day moving average of $284.05 and a 200-day moving average of $298.49. Lithia Motors, Inc. has a 12-month low of $239.78 and a 12-month high of $360.55.

Lithia Motors (NYSE:LAD - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The company reported $7.34 EPS for the quarter, beating analysts' consensus estimates of $7.06 by $0.28. The company had revenue of $9.27 billion during the quarter, compared to the consensus estimate of $9.22 billion. Lithia Motors had a return on equity of 12.49% and a net margin of 1.88%.Lithia Motors's revenue was up 1.0% on a year-over-year basis. During the same period last year, the business posted $7.66 earnings per share. As a group, sell-side analysts expect that Lithia Motors, Inc. will post 34.37 earnings per share for the current year.

Lithia Motors Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, May 22nd. Investors of record on Friday, May 8th were given a dividend of $0.57 per share. The ex-dividend date of this dividend was Friday, May 8th. This is a positive change from Lithia Motors's previous quarterly dividend of $0.55. This represents a $2.28 dividend on an annualized basis and a dividend yield of 0.8%. Lithia Motors's dividend payout ratio (DPR) is 8.01%.

Lithia Motors announced that its Board of Directors has approved a share buyback plan on Tuesday, May 26th that allows the company to buyback $500.00 million in shares. This buyback authorization allows the company to repurchase up to 7.9% of its shares through open market purchases. Shares buyback plans are typically a sign that the company's management believes its stock is undervalued.

Analysts Set New Price Targets

A number of research firms have issued reports on LAD. Wells Fargo & Company lifted their price target on Lithia Motors from $293.00 to $305.00 and gave the company an "equal weight" rating in a research note on Thursday, April 30th. UBS Group began coverage on Lithia Motors in a research note on Wednesday, May 27th. They set a "buy" rating and a $348.00 price target for the company. Zacks Research upgraded Lithia Motors from a "strong sell" rating to a "hold" rating in a research note on Thursday, April 23rd. JPMorgan Chase & Co. lifted their price target on Lithia Motors from $320.00 to $325.00 and gave the company a "neutral" rating in a research note on Thursday, May 7th. Finally, Wall Street Zen upgraded Lithia Motors from a "sell" rating to a "hold" rating in a research note on Saturday, May 30th. Seven equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $368.11.

Insider Buying and Selling

In related news, Director Richard J. Bailey, Jr. sold 297 shares of the stock in a transaction that occurred on Tuesday, May 26th. The stock was sold at an average price of $280.57, for a total transaction of $83,329.29. Following the completion of the sale, the director directly owned 760 shares of the company's stock, valued at approximately $213,233.20. This trade represents a 28.10% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Shauna Mcintyre sold 165 shares of the stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $305.64, for a total value of $50,430.60. Following the sale, the director directly owned 1,681 shares of the company's stock, valued at $513,780.84. The trade was a 8.94% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 782 shares of company stock valued at $229,572 over the last ninety days. 1.08% of the stock is currently owned by company insiders.

About Lithia Motors

Lithia Motors, Inc is an American automotive retailer headquartered in Medford, Oregon. Founded in 1946 as a small auto body and glass shop, the company has grown through organic expansion and strategic acquisitions to become one of the largest automotive retail networks in North America. Lithia operates dealerships across the United States and Canada, offering a broad portfolio of new and pre-owned vehicles from more than 40 different manufacturers.

The company's core business activities include vehicle sales, financing, insurance, parts and service.

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