Sears Holdings Corp (SHLD), AutoNation, Inc. (AN): Billionaire Edward Lampert’s Top Picks Crushed the Market

AutoNation, Inc. (NYSE:AN) is Lampert’s second pick, the position of 8.74 million shares being valued at $527.69 million at the end of 2014, 23.86% of the total value of his equity portfolio. Lampert has been the largest shareholder of the auto retailer among the funds in our database dating all the way back to the beginning of our records in late 2010. He owned 62.23 million shares at that time, which have since been trimmed significantly to current levels. Despite that, it occupies a larger position in his portfolio than it did more than four years ago, as AutoNation, Inc. (NYSE:AN)’s shares have spiked more than 125%, and the overall value of Lampert’s equity portfolio has greatly decreased to just over $2.2 billion now from over $9 billion then. AutoNation has continued its strong, steady run into 2015, gaining 6.49% during the first quarter, benefiting another of its long-time shareholders, Murray Stahl’s Horizon Asset Management, which has been the second-largest shareholder of the company in our database from the beginning until today.

With Sears returning more than 25% and AutoNation 6.5%, and those two stocks accounting for more than 70% of Lampert’s portfolio, the fact that his portfolio was only up by 6% overall tells the story of the returns his final top pick (hint: they weren’t good). Shares of Lands’ End, Inc. (NASDAQ:LE) were squashed during the first quarter, tumbling by 33.51%. The bulk of that dive came after the clothing retailer scaled back its guidance for the fourth quarter of 2014 in January, announcing revenue and earnings that would fall well short of Wall Street’s expectations. The shuttering of its outlets inside of Sears’ stores as part of the separation between the two was a large part of the company’s sales woes, which were expected to decline by 16% to 18% at brick-and-mortar retail locations. Murray Stahl was also an unfortunate shareholder of Lands’ End, Inc. (NASDAQ:LE), and also the second-largest after Lampert, though with a far less significant stake than Lampert, who owns 7.95 million shares which were valued at $429.12 million at the end of 2014; ‘were’ being the optimal word.

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