Hsbc Holdings PLC Grows Position in Lithia Motors, Inc. $LAD

Key Points

• HSBC Holdings PLC increased its Lithia Motors stake by 193.4% in the second quarter, owning 60,113 shares valued at approximately $17.2 million. Other major institutions, including BlackRock and Norges Bank, also initiated or expanded positions.
• Lithia Motors exceeded quarterly expectations, reporting $10.03 in EPS versus the $8.73 consensus and revenue of $9.79 billion. Analysts maintained a generally positive outlook, with a “Moderate Buy” consensus and an average price target of $436.33.
• The company raised its quarterly dividend to $0.70 per share and authorized a $500 million share-repurchase program, allowing buybacks of up to 7.9% of outstanding shares.

Hsbc Holdings PLC increased its holdings in Lithia Motors, Inc. (NYSE:LAD - Free Report) by 193.4% in the 2nd quarter, according to its most recent filing with the SEC. The institutional investor owned 60,113 shares of the company's stock after buying an additional 39,624 shares during the quarter. Hsbc Holdings PLC owned about 0.27% of Lithia Motors worth $17,219,000 at the end of the most recent reporting period.

Several other hedge funds and other institutional investors have also bought and sold shares of the stock. BlackRock Inc. bought a new stake in shares of Lithia Motors in the second quarter worth approximately $696,482,000. Norges Bank purchased a new stake in Lithia Motors in the fourth quarter worth approximately $125,214,000. Madison Asset Management LLC bought a new stake in Lithia Motors in the 2nd quarter worth approximately $66,988,000. Bank of New York Mellon Corp purchased a new stake in Lithia Motors during the 2nd quarter valued at $63,015,000. Finally, River Road Asset Management LLC lifted its holdings in shares of Lithia Motors by 33.6% during the 4th quarter. River Road Asset Management LLC now owns 742,677 shares of the company's stock valued at $246,814,000 after buying an additional 186,628 shares during the period.

Wall Street Analyst Weigh In

A number of equities analysts have recently issued reports on LAD shares. Weiss Ratings upgraded Lithia Motors from a "hold (c)" rating to a "hold (c+)" rating in a research note on Tuesday, August 4th. Bank of America raised their target price on Lithia Motors from $350.00 to $417.00 and gave the stock a "buy" rating in a research report on Thursday, July 9th. Benchmark upped their price target on shares of Lithia Motors from $400.00 to $475.00 and gave the company a "buy" rating in a research report on Thursday, July 30th. JPMorgan Chase & Co. increased their price objective on shares of Lithia Motors from $325.00 to $340.00 and gave the stock a "neutral" rating in a research note on Tuesday, August 4th. Finally, Jefferies Financial Group reiterated a "buy" rating and issued a $490.00 price objective on shares of Lithia Motors in a research note on Thursday, July 30th. Six investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $436.33.

Lithia Motors Trading Down 4.6%

NYSE:LAD opened at $368.89 on Wednesday. The company has a debt-to-equity ratio of 1.46, a current ratio of 1.00 and a quick ratio of 0.21. The firm has a market capitalization of $8.11 billion, a price-to-earnings ratio of 12.24, a price-to-earnings-growth ratio of 0.81 and a beta of 1.23. Lithia Motors, Inc. has a one year low of $239.78 and a one year high of $439.49. The business has a fifty day moving average price of $355.52 and a 200-day moving average price of $304.95.

Lithia Motors (NYSE:LAD - Get Free Report) last announced its earnings results on Wednesday, July 29th. The company reported $10.03 EPS for the quarter, topping analysts' consensus estimates of $8.73 by $1.30. The company had revenue of $9.79 billion for the quarter, compared to analysts' expectations of $9.64 billion. Lithia Motors had a return on equity of 12.16% and a net margin of 1.88%.Lithia Motors's revenue for the quarter was up 2.2% compared to the same quarter last year. During the same period last year, the firm earned $10.24 EPS. Sell-side analysts forecast that Lithia Motors, Inc. will post 36 EPS for the current year.

Lithia Motors Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, August 21st. Stockholders of record on Friday, August 7th were paid a $0.70 dividend. This represents a $2.80 annualized dividend and a dividend yield of 0.8%. This is an increase from Lithia Motors's previous quarterly dividend of $0.57. The ex-dividend date of this dividend was Friday, August 7th. Lithia Motors's dividend payout ratio is 9.29%.

Lithia Motors declared that its Board of Directors has initiated a share buyback plan on Tuesday, May 26th that authorizes the company to buyback $500.00 million in shares. This buyback authorization authorizes the company to purchase up to 7.9% of its stock through open market purchases. Stock buyback plans are often an indication that the company's management believes its stock is undervalued.

Lithia Motors Profile

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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