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Stock Market & Financial Investment News

News Breaks
March 18, 2013
12:35 EDTSAH, TRKSonic Automotive drops after delay in annual report filing
Sonic Automotive (SAH) is sinking after the company disclosed in a regulatory filing earlier today that it would delay filing its annual report to the SEC due to a material weakness in its dealership level accounting processes. Sonic said itís in the process of completing the report and that it believes final financial results will be the same as reported on February 20. The company also indicated that it had amended a credit agreement. Sonic said that the change to its credit agreement would eliminate the company's pledge of 5M shares of Speedway Motorsports (TRK) as collateral for the amount due under a credit facility. The use of the stock as collateral had increased Sonic's borrowing availability by $33.5M as of December 31, Sonic stated. The company said the change would reduce its liquidity, but it added that it still believes that it has enough liquidity to conduct its operations and meet the terms of its debt agreements. The lenders that extended the amended credit facility, which was worth a maximum of $175M before the recent change, do not object to Sonic's material weakness statement, Sonic reported. As a result, Sonic said it will not be in default under the terms of the credit agreement. In early afternoon trading, Sonic gave back $1.10, or 4.5%, to $23.25.
News For SAH;TRK From The Last 14 Days
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January 21, 2015
13:53 EDTSAHGoldman cuts rating on auto dealers citing below consensus U.S. sales view
Goldman Sachs lowered its outlook on auto dealers to Cautious from Neutral, citing several factors, including its belief that U.S. auto sales growth will be "essentially flat" this year. The firm also downgraded its rating on one of the companies in the sector, AutoNation (AN), to Neutral from Buy and removed the stock from its Americas Buy List. WHAT'S NEW: U.S. auto sales will probably rise less than 1% this year on a seasonally adjusted basis, Goldman analyst Patrick Archambault wrote in a note to investors today. Archambault indicated that his U.S. auto sales estimate is significantly below analysts' consensus outlook. Incentive deals and sales to subprime customers last year will probably negatively affect sales growth this year, the analyst stated. Additionally, the growth of dealers' revenue from parts and service is likely to slow this year after a series of major auto recalls were carried out last year, Archambault warned. Dealers may also be hurt by the regulation of auto lenders by the Consumer Financial Protection Bureau, since lenders and dealers split the profits from interest rate markups, the analyst stated. Finally, dealers are trading at a valuation that is 13% above their ten year average, according to Archambault. The analyst cut his rating on AutoNation to Neutral from Buy, based partly on valuation and his belief that the stock's near-term catalysts have diminished after it implemented a rebranding strategy and enhanced its digital systems. Over the medium term, the company's growth prospects will be limited by weak U.S. auto sales growth this year, added Archambault. However, the analyst continues to identify AutoNation as his favorite auto dealer stock. Other auto dealers covered by the analyst include Penske (PAG), which he rates Neutral, and Group 1 (GPI) and Sonic Automotive (SAH), both of which are rated Sell by the analyst. WHAT'S NOTABLE: Automakers whose shares could be negatively affected if the analyst's forecast for anemic U.S. sales growth proves to be accurate include Fiat Chrysler (FCAU), Ford (F), General Motors (GM), Honda (HMC), Nissan (NSANY), Toyota (TM) and Volkswagen (VLKAY). PRICE ACTION: In mid-afternoon trading, AutoNation lost 1.2% to $57.12, Sonic Auto lost 1% to $25.18, Group 1 fell 2.5% to $77.40, and Penske climbed 1% to $47.09.
05:42 EDTSAHAutoNation downgraded to Neutral from Buy at Goldman
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