Diamond Hill Capital

Diamond Hill Capital

Last Update: 02-12-2015

Number of Stocks: 143
Number of New Stocks: 8

Total Value: $13,999 Mil
Q/Q Turnover: 8%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Diamond Hill Capital Watch

  • Want to Go in Kimberly-Clark Corporation?

    In this article, let's take a look at Kimberly-Clark Corporation (KMB), a $39.44 billion market cap company, which is best known for brands such as Kleenex, Scott, Huggies and Kotex.


    Extensive Reach

      


  • Mattel Is losing Ground Due to New Trends and Higher Competition

    In this article, let's take a look at Mattel Inc.(MAT), a $7.65 billion market cap toy company whose successful brands and products include Barbie dolls, Fisher-Price toys, American Girl dolls and books and Hot Wheels.


    Current patterns

      


  • A Look at McDonald´s Performance

    In this article, let's take a look at McDonald's Corp. (MCD), a $93.19 billion market cap company, which ist he largest fast-food restaurant company in the world, with about 35,000 restaurants in 119 countries.


    Revenues, Earnings, Margins and Profitability

      


  • Diamond Hill Select Fund Commentary: Post Holdings, Vantiv, EOG Resources

    We took advantage of the stock market’s over-reaction to food products company Post Holdings, Inc.’s (POST) weak quarterly results to initiate a position in the Fund. We also initiated a position in Vantiv, Inc. (VNTV) as the company’s shares traded lower after a mild third quarter disappointment in the financial institution segment of its business. The shares then rebounded during the fourth quarter as investors focused on the long-term growth story and attractive valuation. We believe Vantiv has an attractive growth profile and should continue to generate high single-digit organic revenue growth and mid-teens earnings per share growth.


    We eliminated our position in oil and gas exploration and production company EOG Resources, Inc. (EOG) as a result of what we believe to be structural changes in the competitive dynamics of the global oil industry and subsequent change to our estimate of intrinsic value. A combination of domestic oil production growth, an increase in the supply of oil from Libya, weakening demand trends in Europe and Asia, and OPEC’s unwillingness to reduce output to mitigate anticipated over-supply led to a significant decline in oil prices as well as a decline in the oil price outlook over the next few years.

      


  • Diamond Hill Capital Large Cap Commentary: Capital One, Eastman Chemical

    We initiated new positions in two companies. Credit services company Capital One Financial Corp. (COF) is one of the most recognized brands in financial services and the 8th largest bank in the U.S. The firm has national scale as a top five credit card and auto lender and a significant traditional branch banking presence with commercial lending capabilities in a number of large U.S. markets. We expect Capital One’s core credit card and auto loan segment to experience continued loan growth as a function of an improving economy, an improving job market and increasing confidence in consumer spending decisions. Capital One also benefits from the continuing shift in favor of electronic payments (i.e., ApplePay) versus cash and check. We believe Capital One will continue to generate healthy returns in a business model that is capital generative and the market will reward Capital One for its earnings power and its management’s new focus on returning capital to shareholders versus acquisitions.


    We also initiated a position in specialty chemical company Eastman Chemical Co. (EMN) when concerns about the company’s Fibers business led to a decline in the shares which we believe provided an attractive entry point. The company continues to add higher-margin, strong cash flow-generating businesses to its portfolio while the company is much less exposed to petrochemical earnings than its peers Dow Chemical Co. (DOW) and LyondellBasell Industries N.V. (LYB).

      


  • Diamond Hill Capital Comments On New Positions

    We initiated a position in financial holding company BOK Financial Corp. (BOKF), a high-quality, Oklahoma-based bank that we have followed for years. BOK Financial has a great franchise, and due to large insider ownership, its shares are infrequently available at an attractive discount to intrinsic value. The shares sold off after oil prices declined reflecting BOK’s larger-than-peer exposure to the energy sector. We believe the market was penalizing the shares more than justified and not respecting the company’s multi-decade track record of sound underwriting in the energy sector.


    We initiated a position in pest control services company Rollins, Inc. (ROL), one of the largest residential and commercial pest extermination businesses in the country. We view Rollins as a very high quality business run by a strong management team. During the broader market selloff in October, the stock declined to a discount to our estimate of intrinsic value. The stock appreciated and quickly reached our estimate of intrinsic value in a short period of time, so we exited our position.

      


  • Diamond Hill Capital Comments on Nationstar Mortgage Holdings Inc

    The largest detractors within financials were First Niagara Financial Group, Inc. and Nationstar Mortgage Holdings, Inc (NSM). Nationstar is a non-bank mortgage servicer whose primary competitor, Ocwen Financial Corp., has encountered great regulatory scrutiny. We believe Nationstar may ultimately benefit from Ocwen’s problems, while thus far the market is skeptical.

    From Diamond Hill Capital (Trades, Portfolio)’s Small Cap Fund 2014 Portfolio Commentary.  


  • Diamond Hill Small Cap Fund 2014 Portfolio Commentary

    The Diamond Hill Small Cap Fund returned 4.86% (Class I) in 2014 compared to a 4.89% return for the Russell 2000 Index. In 2014, the small cap market’s best performing sectors were healthcare, utilities, and consumer staples. These sectors tend to be seen as relatively defensive and associated with “safe havens.” Utilities, in particular, also tend to do well when interest rates fall as many view regulated utilities as the most bond-like of equity investments. Government interest rates declined during the year, with the 10-year Treasury finishing below 2.2%, down from levels around 3% at the beginning of the year. Energy was by far the worst performing sector in 2014, as crude oil prices declined nearly 50%. The Fund’s underperformance can largely be attributed to having a larger allocation to energy stocks and a smaller allocation to healthcare stocks than the Index. In addition, while stock selection was generally good, the consumer staples sector was an exception.


    The Fund’s financial holdings were the largest contributors in 2014. The Fund averaged roughly 27% of net assets invested in this sector, with nearly half of that amount in insurance companies. Banks and real estate investment trusts (REITs) each comprised about a fifth of the financial sector holdings. Winthrop Realty Trust, Inc. (FUR) announced a liquidation plan to sell all its assets and distribute the proceeds to shareholders within a two-year period. Thus far, asset sales have come in a bit above the mid-point of ranges that the company has used in its internal estimate of net asset value. In total, these developments led to a 65% total return for the stock in the year. Insurance or reinsurance companies including HCC Insurance Holdings, Inc. (HCC), Navigators Group, Inc. (NAVG), Alleghany Corp. (Y), Enstar Group Ltd. (ESGR), American Equity Investment Life Holding Co. (AEL), and Reinsurance Group of America (RGA) all experienced total returns between 10% and 18.5%. The largest detractors within financials were First Niagara Financial Group, Inc. (FNFG) and Nationstar Mortgage Holdings, Inc (NSM). Nationstar is a non-bank mortgage servicer whose primary competitor, Ocwen Financial Corp., has encountered great regulatory scrutiny. We believe Nationstar may ultimately benefit from Ocwen’s problems, while thus far the market is skeptical.

      


  • Diamond Hill Capital Q4 2014 Market Review

    Driven by an expanding economy, growing corporate profits, and persistently low interest rates, the broad U.S. equity market posted its sixth consecutive annual gain in 2014. The S&P 500 Index finished the year with a 13.7% total return (including dividends), and the Federal Reserve signaled its belief in the economy’s ability to grow without assistance by concluding its bond purchasing program known as Quantitative Easing, or QE, in October 2014. Although investors expect the Fed to raise interest rates sometime in 2015, its overall monetary policy remains accommodative, encouraging equity investors.


    In the U.S., unemployment fell as a result of the best hiring stretch since the late 1990s. The U.S. consumer benefitted from a steep decline in gasoline prices to the lowest levels in five years, adding more buying power beyond modest wage gains. The sharp decline in the price of oil over the past few months is likely to improve household budgets. Globally, central banks remained extraordinarily accommodative in an attempt to provide a backdrop for increased economic growth. Europe, which has been a clear economic laggard over the past few years, was still only showing modest signs of improvement. Meanwhile, China and India continued to grow at healthy mid-single digit rates, but many other emerging economies around the world are seeing decelerating growth rates. The U.S. dollar ended the year strong relative to other currencies as investors were confident that stronger economic growth in the U.S. will lead the Fed to raise rates in 2015 for the first time since before the financial crisis.

      


  • Diamond Hill Capital Comments on EOG Resources Inc

    We eliminated our position in oil and gas exploration and production company EOG Resources, Inc. (EOG) as a result of what we believe to be structural changes in the competitive dynamics of the global oil industry and subsequent change to our estimate of intrinsic value. A combination of domestic oil production growth, an increase in the supply of oil from Libya, weakening demand trends in Europe and Asia, and OPEC’s unwillingness to reduce output to mitigate anticipated over-supply led to a significant decline in oil prices as well as a decline in the oil price outlook over the next few years.

    From Diamond Hill Capital (Trades, Portfolio)’s Select Fund Q4 2014 Commentary.  


  • Diamond Hill Capital Comments on Vantiv Inc

    We also initiated a position in Vantiv, Inc. (VNTV) as the company’s shares traded lower after a mild third quarter disappointment in the financial institution segment of its business. The shares then rebounded during the fourth quarter as investors focused on the long-term growth story and attractive valuation. We believe Vantiv has an attractive growth profile and should continue to generate high single digit organic revenue growth and mid-teens earnings per share growth.

    From Diamond Hill Capital (Trades, Portfolio)’s Select Fund Q4 2014 Commentary.  


  • Diamond Hill Capital Comments on Alere Inc

    Diagnostic systems provider Alere, Inc. (ALR) declined after installing a new CEO during the quarter, while weathering an unsolicited attempt by the previous CEO to take the company private. Subsequently, the company announced that it would sell its Health Management business in a first sign of the implementation of a new agenda focused on asset sales and debt paydown.

    From Diamond Hill Capital (Trades, Portfolio)’s Select Fund Q4 2014 Commentary.  


  • Diamond Hill Capital Comments on Hub Group Inc

    Freight transportation management company Hub Group, Inc. (HUBG) declined after it reported weak third quarter earnings. The company also lowered guidance for the remainder of the year due to poor service levels from its rail partners, as well as a legal settlement with drayage drivers in California. We believe rail service levels should begin to improve in 2015 as railroads are currently making investments to add additional capacity.

    From Diamond Hill Capital (Trades, Portfolio)’s Select Fund Q4 2014 Commentary.  


  • Diamond Hill Capital Comments on International Business Machines Corp

    Diversified information technology company International Business Machines Corp. (IBM) declined after the company reported disappointing third quarter earnings and management indicated that it would fail to meet the 2015 earnings guidance detailed in the company’s much-publicized 2015 Roadmap.

    From Diamond Hill Capital (Trades, Portfolio)’s Select Fund Q4 2014 Commentary.  


  • Diamond Hill Capital Comments on Willis Group Holdings PLC

    Insurance brokerage firm Willis Group Holdings PLC (WSH) reported worse than anticipated third quarter earnings with organic revenue growth in the company’s Global segment hurt by a soft reinsurance market and tough comparisons in the prior year period. However, expenses stabilized and the company appears poised to show meaningful margin improvement over the next several quarters.

    From Diamond Hill Capital (Trades, Portfolio)’s Select Fund Q4 2014 Commentary.  


  • Diamond Hill Select Fund Q4 2014 Commentary

    The Fund increased 6.17% (Class I) during the quarter, compared to a 5.24% increase in the Russell 3000 Index.


    The Fund’s holdings in the consumer discretionary, financials, and health care sectors provided the largest contributions to absolute return, while holdings in the energy sector detracted from return.

      


  • Diamond Hill Capital Comments on Trinity Industries Inc

    Railroad service company Trinity Industries, Inc. (TRN) declined, as the railcar segment is heavily influenced by demand for tank cars to transport oil. Weaker oil pricing puts this demand at risk. The company also suffered a setback in a large lawsuit.

    From Diamond Hill Capital (Trades, Portfolio)’s Small Cap Fund Q4 2014 Commentary.  


  • Diamond Hill Capital Comments on Aircastle Ltd

    Aircraft rental and leasing company Aircastle Ltd. (AYR) rose after reporting strong third quarter earnings, as core leasing revenue increased and cash interest margins improved due to lower financing costs. The company also increased its quarterly dividend and announced a share repurchase authorization.

    From Diamond Hill Capital (Trades, Portfolio)’s Small Cap Fund Q4 2014 Commentary.  


  • Diamond Hill Small Cap Fund Q4 2014 Commentary

    The Fund increased 2.84% (Class I) during the quarter, compared to a 9.73% increase in the Russell 2000 Index.


    The Fund’s holdings in the financials and consumer discretionary sectors provided the largest contributions to absolute return, while holdings in the energy sector detracted from return.

      


  • Diamond Hill Adds Two Companies to Portfolio in Third Quarter

    At its web site, Diamond Hill Capital (Trades, Portfolio) Management calls itself “an independent investment management firm headquartered in Columbus, Ohio.”


    In its summary of its investment philosophy, Diamond Hill writes, “We focus on the fundamentals of intrinsic value, which are far less volatile than market price, and our actions are ultimately dictated by the price to intrinsic value relationship.”

      


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