Public Sector Pension Investment Board Boosts Sonic Automotive Holdings

Public Sector Pension Investment Board increased its stake in Sonic Automotive, Inc. (NYSE: SAH) by an impressive 39.5% during the third quarter of 2023, according to Holdings Channel.com. Following the purchase of an additional 19,483 shares, the fund now holds 68,842 shares valued at approximately $5,238,000. This significant investment reflects growing confidence in Sonic Automotive’s market position among institutional investors.

Several other institutional investors and hedge funds have also adjusted their holdings in Sonic Automotive recently. Notably, Royal Bank of Canada raised its stake by 37.1% in the first quarter, acquiring an additional 3,777 shares for a total of 13,946 shares valued at $795,000. AQR Capital Management LLC increased its holdings by 13.6%, now owning 23,310 shares worth $1,328,000 after purchasing an additional 2,793 shares.

Goldman Sachs Group Inc. made a substantial move, boosting its position by 124.9%, with ownership of 355,328 shares valued at $20,239,000 after acquiring an additional 197,336 shares. Meanwhile, UBS AM, a distinct business unit of UBS Asset Management Americas LLC, increased its holdings by 15.8% to 38,698 shares, valued at $2,204,000. Collectively, institutional investors and hedge funds now own 46.92% of Sonic Automotive’s stock.

Recent Performance and Financials

Sonic Automotive’s stock has seen fluctuations, with shares trading up 2.6% recently. The company released its quarterly earnings on February 18, 2024, reporting earnings per share (EPS) of $1.52, just below analysts’ expectations of $1.53. The reported revenue for the quarter was $3.87 billion, falling short of the anticipated $3.94 billion. Year-over-year, Sonic Automotive’s revenue decreased by 0.6%, compared to an EPS of $1.51 in the same quarter last year. Analysts anticipate that Sonic Automotive will achieve an EPS of $6.14 for the current fiscal year.

In addition to its financial performance, Sonic Automotive announced a quarterly dividend of $0.38 per share, which will be distributed on April 15, 2024. Shareholders on record as of March 13, 2024, will be eligible for this payment, representing an annualized dividend of $1.52 and a yield of 2.4%. The company’s current dividend payout ratio stands at 41.08%.

Insider Trading and Analyst Ratings

In related developments, major shareholder Paul P. Rusnak acquired 11,481 shares at an average price of $59.95 each, totaling approximately $688,286. Following this transaction, Rusnak holds about 5.1 million shares valued at around $305.7 million. Over the past three months, insiders have purchased 100,000 shares worth approximately $5.99 million, with insiders collectively owning 42.65% of the company’s stock.

Equities analysts have provided mixed ratings on Sonic Automotive’s shares. Weiss Ratings maintained a “hold (c)” rating, while Needham & Company LLC issued a “buy” rating with a price target of $90.00. Zacks Research upgraded the stock from a “strong sell” to a “hold” rating. Conversely, Barclays lowered its price objective from $71.00 to $69.00, maintaining an “equal weight” rating. Currently, four analysts recommend a buy, five rate the stock as a hold, and one analyst has issued a sell rating. MarketBeat data indicates a consensus rating of “hold” with an average target price of $77.75.

Sonic Automotive, Inc., headquartered in Charlotte, North Carolina, operates a network of franchised new-car and used-vehicle dealerships across the United States. The company provides a variety of services, including vehicle sales, leasing, financing, and insurance products, as well as service and parts. Additionally, Sonic Automotive has developed digital retail capabilities that enhance customer experience by allowing transactions to be completed online.

This recent surge in institutional investment and the company’s strategic financial maneuvers position Sonic Automotive for potential growth in the competitive automotive market.