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Diamond Hill Capital Reports Portfolio Updates: More Sells Than Buys in Q3 Trade Activity
Posted by: Dianne Tordillo (IP Logged)
Date: October 22, 2012 10:41PM
Based in Columbus, Ohio, independent and publicly owned Diamond Hill Capital Management Inc. (DHIL) is a registered investment adviser that manages the mutual funds, separate accounts and private investments of institutions, financial intermediaries and individuals. Deeply driven by intrinsic value, Diamond Hill’s investment model is aligned with the Graham-Buffett philosophy, investing in companies when their market prices are at a discount to the firm’s projection of future cash flows.
With the end of the third quarter, Diamond Hill reported a total of 31 transactions.
Accounting for about half of Diamond Hill’s third quarter trade activity, the firm reduced its stake in 15 companies belonging to various industries including financial services, consumer goods and energy, which are among the largest industries represented in Diamond Hill’s portfolio composition.
The companies that took the most hit in terms of reductions to existing Diamond Hill shareholdings include US Bancorp (USB) which endured a 99.47 percent decrease of the firm’s stake, Corelogic Inc. (CLGX) at 99.27 percent of the firm’s stake and Jarden Corp. (JAH) at 81.44 percent of the firm’s stake.
Diamond Hill also sold all of its shares of five companies: Liquidity Services Inc. (LQDT), Groupon Inc. (GRPN), Exterran Holdings Inc. (EXH), Discover Financial Services (DFS) and Bank of America Corp. (BAC).
Using an interdisciplinary approach to investing, Diamond Hill looks at several financial models such as cash flow, private market value and leveraged buyout analyses to determine valuation of a stock. The firm also considers other factors such as economics, probability, politics and consumer behavior, including anything that would “help forecast future cash flows,” according to its website.
In addition to the company’s sells mentioned, Diamond Hill introduced four companies to its portfolio in the third quarter, as wells as seven cases of add-ons to Diamond Hill’s existing shareholdings. To view details about Diamond Hill’s third quarter trade activity, visit Diamond Hill Capital’s GuruFocus Stock Picks.
Below are Diamond Hill’s largest reduction transactions in dollar amount for the third quarter. Each description also shows the GuruFocus Valuation Box Feature, which indicates the stock prices relative to a few alternative valuation measures.
US Bancorp (USB)
Diamond Hill shed 99.47 percent of its shares of US Bancorp in the third quarter. From more than 4 million shares in the previous quarter, Diamond Hill brought its current holding down to a little over 22,000 shares.
This transaction represented not only the largest in reduction percentage, but also Diamond Hill’s largest sold in dollar amount for the third quarter; Diamond Hill profited more than $145 million after selling a majority of its USB shares.
View US Bancorp’s Valuation Box at the top of the page of it stock summary.
US Bancorp reported about $352 billion in assets by the end of the third quarter. Operating 3,086 banking offices in 25 states, the commercial bank offers services including banking, brokerage, insurance, investment mortgage, trust and payment services, according to its website.
Currently selling at a market price of $34.15, US Bancorp has a market cap of $64.88 billion, a P/E (ttm) ratio of 12, a P/B ratio of 1.9 and a P/S value of 3.
Both its P/B and P/S ratios are close to three-year highs according to GuruFocus Stock Analysis.
Exxon Mobil Corp. (XOM)
Diamond Hill made $46,740,214.08 after selling about 507,000 of its shares of Exxon Mobil. This transaction brought the firm’s shareholding of the company right under 1.4 million shares, accounting for 26.73 percent of Diamond Hill’s stake, which is the lowest in terms of the firm’s reduction percentage for the third quarter.
Although lowest in percentage, the transaction is Diamond Hill’s second largest in dollar amount for the third quarter.
Diamond Hill first acquired Exxon Mobil in the second quarter of 2010 starting off with about 1.7 million shares. The most recently-made trade places Diamond Hill at its lowest shareholding of the company.
Exxon Mobil is an oil and gas company that operates in North America, South America, Europe, Africa and Asia, under several brands besides ExxonMobil, such as Esso, Exxon, and Mobil1.
View Exxon Mobil’s Valuation Box at the top of the page on its stock summary.
Currently trading close to its 10-year high at $91.29 per share, it has a market cap of $425.36 billion, a P/B ratio of 2.57, a P/S ratio of .87 and a P/E (ttm) ratio close to its one-year high at 9.3.
CoreLogic Inc. (CLGX)
As Diamond Hill’s third largest transaction amount in reductions for the third quarter, the firm decreased 99.27 percent of its shares with CoreLogic, profiting about $29 million from the sell.
CoreLogic is a company that provides business and analytical services – such as credit reporting, direct marketing and default management, to name a few – to the financial, consumer and property industries. Based in Irvine, Calif., CoreLogic serves more than one million clients globally.
View CoreLogic’s Valuation Box at the top of the page of its stock summary.
Selling close to its two-year high at $26.34 per share, CoreLogic has a market cap of $2.79, a P/E (ttm) ratio of 294.6, a P/B ratio of 2.2 and a P/S ratio of 2.1.
Both its P/S and P/B ratios are close to three-year highs according to GuruFocus Stock Analysis.
Guru Discussed: Diamond Hill Capital: Current Portfolio, Stock Picks
Stocks Discussed: USB, CLGX, JAH, LQDT, GRPN, EXH, DFS, BAC, XOM,