Ed Lampert remains acquisitive in the face of a downturn that has whacked holdings in his once-winning portfolio.
The Greenwich, Conn.-based hedge fund maven has a fresh stake in home improvement retailer
, and he added to his position in the banking behemoth
, according to regulatory filings made public on Thursday.
Like Lampert himself, both companies have been recent victims of turmoil in the U.S. housing market. Home Depot and Citigroup have both fired their CEOs and changed strategy, but Lampert, undeterred, is only getting more aggressive.
Shares of his retail empire,
, have lost a third of their value since the beginning of June. Euphoria on Wall Street over the hidden value of the company's real estate assets has died down as the real estate market has gone south. Also, the retailer's sales declines have steepened as consumer spending gets squeezed by the housing crunch.
Lampert presides at the Sears as chairman having cobbled it together by using Kmart to acquire Sears Roebuck in 2004. His fund, ESL Investment Management, owns roughly 46% of the company's shares outstanding. It added to its stake in July, according to filings with the
Securities & Exchange Commission
Meanwhile, the fund acquired a stake in Citigroup through an entity called RBS Partners in the first quarter of 2006. Lampert's acquisition, though modest in relation to the company's total outstanding shares, was embraced as a
potential catalyst for change as calls went out on Wall Street for the scalp of its CEO, Chuck Prince.
Since then, staggering write-downs on mortgage-backed securities holdings at investment banking giants, like Citi, became a less-welcome catalyst. Stan O'Neal was forced out of
( MER), while Prince was also canned.
While heads are rolling on Wall Street, foreclosures in the housing market are continuing to rise, and investors see further skeletons in the closets of major U.S. financial institutions.
A third of Citigroup's market value has vanished since June, and its shares were recently trading down 2.8% on Thursday despite news that Lampert increased his stake in the company in the third quarter to 27.8 million shares from 24.8 million in the second quarter.
Lampert inspired more optimism at Home Depot, which recently bummed out investors by saying it would put the brakes on its
massive share buyback plan in the fourth quarter in the face of further deterioration in the housing market. He acquired 16.7 million shares in the retailer, valued at $541.3 million.
Home Depot reported a 27% drop in third-quarter profits on Tuesday amid same-store sales declines across most categories. It also cut its profit forecast for the year and halted its share repurchasing, which has provided a substantial boost to its earnings per share in recent periods.
The retailer has seen its shares drop 25% since the beginning of June as it bore the brunt of a spending slowdown in all things housing-related,
Filings also show that Lampert abandoned his stake in
( MOT) in the third quarter, and he resumed his position in
with a stake of 464,600 shares, or $17.4 million, after dropping 881,100 shares, worth $30.9 million, in the second quarter.
While the housing mess has knocked Lampert's star down a few pegs on Wall Street this year, he's still viewed as a value investor who models himself after
( BRK-A) legendary chairman, Warren Buffett.
With a penchant for contrarian moves towards bargain securities from which the broader market is fleeing, Lampert can be expected to pursue investments where he sees underlying value regardless of the ups and downs of stock indices and the economy.
Lampert, through a spokesman, declined to comment on this story.