Lampert's hedge fund hikes AutoNation stake again

BOSTON, Nov 28 (Reuters) - Hedge fund manager Edward Lampert, already the biggest investor of AutoNation (AN.N: Quote, Profile, Research, Stock Buzz), boosted his stake in the car dealer chain to 30 percent, a regulatory filing shows.

The filing made with the U.S. Securities and Exchange Commission late on Tuesday shows that Lampert's fund now owns 55.3 million shares, up from the 52.4 million, or 28.5 percent stake, he owned earlier in the month.

The stock was up 6.67 percent at $16.81 on Wednesday, reversing course after weeks of losses. Since the start of the year, AutoNation's share price has lost 26.13 percent.

Lampert, who has been managing his hedge fund ESL Investments since 1988, built a reputation for delivering hefty payouts to investors by finding undervalued stocks.

He tends to make big bets on a small number of companies like Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz)., Sears Holdings (SHLD.O: Quote, Profile, Research, Stock Buzz), and Home Depot (HD.N: Quote, Profile, Research, Stock Buzz), and has lost money only twice, in 1990 and 2002. Industry analysts and investors, however, are speculating that in light of Citi's heavy losses this year, 2007 might mark another off year for Lampert's portfolio. (Reporting by Svea Herbst-Bayliss, editing by Dave Zimmerman)