You all know all this already, but... if the company is selling at a P/E of half the S&P 500, is growing rapidly, is buying back stock, is in a suddenly in favor basic industry, can be considered a value stock, has an investment banker exploring ways to improve stock market value, is considering spinning off a .com tracking subsidiary, well if this stock doesn't move up then there is simply no justice. God only knows when the market will come out of its doldrums,but when it does, I see little downside potential and probable easy money. I am holding onto the stock forever in my Keogh.
<<FORT LAUDERDALE, Fla., May 25 (Reuters) - AutoNation Inc. AN Co-Chief Executive Wayne Huizenga said on Tuesday the largest U.S. auto retailer was considering issuing a tracking stock for its Internet business and other business-altering moves to boost AutoNation's depressed stock price.
Huizenga, a Florida billionaire, said Fort Lauderdale-based AutoNation had hired investment bankers Merrill Lynch to devise strategic moves that could include partnerships, joint ventures, or acquisitions involving the company's various car businesses, as well as creation of a tracking stock for the AutoNation.com operation on the Internet.
"A tracking stock would allow AutoNation to keep the revenues and sales, while creating value for our shareholders," he said at the company's annual shareholders meeting.
So-called tracking stocks have been issued by media, telecommunications, biotechnology and other companies in recent years to highlight for Wall Street fast-growing businesses within larger corporations. Typically, the tracking shares trade separately but carry reduced or no ownership rights and allow managers to keep control of the assets housed in the tracking shares.
Huizenga gave few details, other than to say he hoped to issue some of the tracking stock to AutoNation's shareholders if the proposal won tax-free status from the U.S. government. AutoNation recently sold off an interest in a waste hauling business after U.S. tax authorities refused to consider a proposed spinoff of the multi-billion dollar operation as tax free.
AutoNation.com yielded leads producing some $150 million of revenues in January, February and March and was expected by the company to yield $500 million in revenues for all of 1999. Executives said at the meeting that the site was being improved and would soon allow customers to buy cars without visiting any of the company's traditional car stores.
Owner of more than 12 percent of AutoNation's 447 million shares, Huizenga told shareholders, including one who complained that the worth of her holdings had fallen by two thirds in the last two years, that the company was grossly undervalued and would likely bounce back when traditional value investing came back in fashion on Wall Street.
Huizenga said AutoNation had a commanding lead in the fragmented $1.5 trillion U.S. market for vehicles and automotive services, no net debt beyond loans tied to the company's fleets for its National and Alamo car rental agencies and strong buy recommendations of top financial institutions.
"There is no rational explanation for this," Huizenga said.
He said the company, which now has 380 dealerships across the United States, was continuing to buy back its shares and had $150 million left under a $500 million share repurchase program begun last summer.>>
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