Lampert increases stake in AutoNation

DETROIT (Reuters) - Billionaire investor Edward Lampert has raised his stake in AutoNation Inc (AN.N), the No. 1 U.S. auto dealership group, to nearly 38 percent, according to federal regulatory filings.

Lampert, who is also chairman of Sears Holdings Corp (SHLD.O), bought 383,500 shares on April 30 for prices ranging from $15.89 to $16 per share, raising holdings under his control to about 67.6 million shares.

The additional share purchases were disclosed in filings with the U.S. Securities and Exchange Commission on Friday.

The largest shareholder in AutoNation, Lampert has been steadily increasing his holdings in the company through his various affiliates.

Lampert, who has been managing his hedge fund ESL Investments since 1988, has built a reputation for investors by finding undervalued stocks. He also holds a big stake in auto parts retailer AutoZone Inc (AZO.N).

Shares in AutoNation are up about 4 percent since the start of the year, but are still down by more than a quarter from their recent high of nearly $23 in June last year.

The stock's decline has mirrored a slump in U.S. new car sales tied to a slowing U.S. economy, tighter credit markets and a slumping housing market.

Fort Lauderdale, Florida-based AutoNation posted a first-quarter profit of almost $51 million, a lower-than-expected result as the U.S. housing market continued to crimp demand in the key California and Florida markets.

The company owns and operates 321 vehicle franchises in 15 states with a range of U.S., Asian and European automobile brands.

(Reporting by David Bailey and Kevin Krolicki; Editing by Tim Dobbyn)