Public Sector Pension Investment Board Increases Stake in Sonic Automotive

The Public Sector Pension Investment Board has increased its holdings in Sonic Automotive, Inc. (NYSE: SAH) by a remarkable 39.5% during the third quarter of 2023. Following its latest purchase of an additional 19,483 shares, the fund now owns 68,842 shares of the company, valued at approximately $5,238,000 as of the most recent reporting period.

This move reflects a growing interest among institutional investors in Sonic Automotive. Notably, the Royal Bank of Canada expanded its stake by 37.1% in the first quarter, acquiring 3,777 shares to reach a total of 13,946 shares, valued at $795,000. Similarly, AQR Capital Management LLC increased its holdings by 13.6%, bringing its total to 23,310 shares worth $1,328,000. The trend continued with MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increasing its position by 5.8% and Goldman Sachs Group Inc. significantly boosting its stake by 124.9%, now owning 355,328 shares valued at $20,239,000. In total, institutional investors and hedge funds currently own approximately 46.92% of Sonic Automotive’s stock.

Recent Performance and Dividend Announcement

On February 18, 2024, Sonic Automotive released its quarterly earnings report, revealing earnings per share (EPS) of $1.52. This figure fell short of analysts’ expectations, which had predicted an EPS of $1.53. The company reported revenues of $3.87 billion, below the anticipated $3.94 billion. The net margin for the quarter was 0.78%, and the return on equity stood at 21.56%. This performance indicates a slight decline, with revenues down 0.6% compared to the same period last year, when the company earned an EPS of $1.51.

In addition, Sonic Automotive has announced a quarterly dividend of $0.38, set to be paid on April 15, 2024. Shareholders of record on March 13, 2024 will receive this dividend, reflecting an annualized payout of $1.52 and a yield of 2.4%. The company’s dividend payout ratio currently stands at 41.08%.

Insider Activity and Analyst Ratings

Recent insider transactions reveal that major shareholder Paul P. Rusnak purchased 11,481 shares on February 17, 2024, at an average price of $59.95 per share, totaling approximately $688,286. Following this acquisition, Rusnak’s total ownership in Sonic Automotive increased to 5,100,000 shares, valued at around $305.7 million. Over the last three months, insiders have acquired a total of 100,000 shares worth $5,994,472, with insiders now owning 42.65% of the company.

Equities analysts have also weighed in on Sonic Automotive’s stock. Weiss Ratings has maintained a “hold” rating, while Needham & Company LLC has reiterated a “buy” rating with a target price of $90.00. Zacks Research upgraded Sonic Automotive from a “strong sell” to a “hold” rating. In contrast, Barclays and Stephens revised their price targets downward, suggesting a more cautious outlook. Currently, the consensus rating for Sonic Automotive stands at “Hold,” with an average target price of $77.75.

Sonic Automotive, based in Charlotte, North Carolina, operates a network of franchised new-car and used-vehicle dealerships across the United States. The company provides a comprehensive range of services, including vehicle sales, leasing, financing, and collision repair, while also enhancing its digital retail capabilities to facilitate online transactions.

As Sonic Automotive continues to navigate the evolving automotive landscape, investor interest and insider activity reflect a complex interplay of confidence and caution in the market.