Sonic Automotive (NYSE:SAH) Shares Pass Above Two Hundred Day Moving Average - Time to Sell?

Key Points

• Sonic Automotive shares rose above their 200-day moving average, trading as high as $79.31 versus the $76.90 average, though the stock later traded around $77.85 and remained below its 50-day average of $87.62.
• Analyst sentiment is mixed: six analysts rate the stock a Buy, three Hold, and two Sell. The consensus rating is Hold, with an average price target of $97.33; targets range from $72 to $109.
• The company exceeded quarterly earnings and revenue expectations, while maintaining a $0.41 quarterly dividend, equivalent to a 2.1% yield. However, insiders sold 100,000 shares over the past quarter, including a 50,000-share sale by President Jeff Dyke.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report)'s stock price crossed above its two hundred day moving average during trading on Tuesday . The stock has a two hundred day moving average of $76.90 and traded as high as $79.31. Sonic Automotive shares last traded at $77.85, with a volume of 278,996 shares traded.

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on the company. UBS Group upped their price target on Sonic Automotive from $90.00 to $109.00 and gave the company a "buy" rating in a research report on Friday, July 10th. Weiss Ratings upgraded Sonic Automotive from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Thursday, August 6th. Stephens set a $89.00 price objective on Sonic Automotive in a research note on Monday, July 13th. JPMorgan Chase & Co. reduced their target price on Sonic Automotive from $76.00 to $72.00 and set an "underweight" rating on the stock in a report on Tuesday, August 4th. Finally, Morgan Stanley downgraded shares of Sonic Automotive from an "equal weight" rating to an "underweight" rating and set a $72.00 target price for the company. in a research report on Friday, August 7th. Six investment analysts have rated the stock with a Buy rating, three have given a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus price target of $97.33.

Sonic Automotive Trading Down 1.0%

The firm's 50-day moving average price is $87.62 and its 200 day moving average price is $76.90. The company has a market cap of $2.46 billion, a price-to-earnings ratio of 12.42, a P/E/G ratio of 1.26 and a beta of 0.86. The company has a current ratio of 1.01, a quick ratio of 0.25 and a debt-to-equity ratio of 1.88.

Sonic Automotive (NYSE:SAH - Get Free Report) last released its earnings results on Thursday, July 30th. The company reported $1.82 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.75 by $0.07. The company had revenue of $3.93 billion for the quarter, compared to the consensus estimate of $3.78 billion. Sonic Automotive had a net margin of 1.37% and a return on equity of 20.75%. Sonic Automotive's quarterly revenue was up 7.6% compared to the same quarter last year. During the same quarter in the previous year, the company earned $2.19 EPS. As a group, equities analysts expect that Sonic Automotive, Inc. will post 6.95 EPS for the current year.

Sonic Automotive Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 15th. Stockholders of record on Tuesday, September 15th will be issued a dividend of $0.41 per share. The ex-dividend date is Tuesday, September 15th. This represents a $1.64 annualized dividend and a dividend yield of 2.1%. Sonic Automotive's dividend payout ratio is currently 26.16%.

Insider Activity

In other news, President Jeff Dyke sold 50,000 shares of the stock in a transaction dated Monday, June 8th. The shares were sold at an average price of $82.97, for a total transaction of $4,148,500.00. Following the transaction, the president owned 111,622 shares of the company's stock, valued at $9,261,277.34. This represents a 30.94% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 100,000 shares of company stock worth $8,408,160. 43.68% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in SAH. Northwestern Mutual Wealth Management Co. boosted its holdings in Sonic Automotive by 992.5% in the second quarter. Northwestern Mutual Wealth Management Co. now owns 437 shares of the company's stock worth $35,000 after acquiring an additional 397 shares in the last quarter. National Bank of Canada FI bought a new stake in shares of Sonic Automotive during the third quarter valued at approximately $78,000. State of Wyoming acquired a new position in shares of Sonic Automotive during the first quarter worth approximately $79,000. Ameritas Advisory Services LLC acquired a new position in shares of Sonic Automotive during the second quarter worth approximately $88,000. Finally, Raymond James Financial Inc. bought a new position in shares of Sonic Automotive in the 2nd quarter worth $168,000. 46.92% of the stock is owned by institutional investors and hedge funds.

About Sonic Automotive

Sonic Automotive, Inc is a publicly traded automotive retailer that operates a network of franchised new-car dealerships and used-vehicle dealerships across the United States. Headquartered in Charlotte, North Carolina, the company offers a range of services that include vehicle sales, leasing, finance and insurance products, service and parts, and collision repair. Sonic Automotive's dealerships represent numerous major automotive brands, and the company also markets a broad selection of pre-owned vehicles under its own banner.

In addition to its core dealership operations, Sonic Automotive has developed digital retail capabilities that allow customers to research, shop and complete transactions online.

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