Diamond Hill Investment Group Inc. (DHIL, Financial) filed Quarterly Report for the period ended 2010-09-30.
Diamond Hill Investment Group Inc. has a market cap of $233.4 million; its shares were traded at around $83.98 with a P/E ratio of 19.9 and P/S ratio of 5.5. The dividend yield of Diamond Hill Investment Group Inc. stocks is 11.8%.DHIL is in the portfolios of Whitney Tilson of T2 Partners Management, LP, Chuck Royce of Royce& Associates.
Investment Advisory Fees. Investment advisory fees increased by $2.7 million, or 28%, due to a 29% increase in AUM from September 30, 2009 to September 30, 2010. Investment advisory fees are calculated as a percent of average net AUM at various levels depending on the investment product. The Companys average advisory fee rate for the three months ended September 30, 2010 was 0.72% compared to 0.74% for the three months ended September 30, 2009. The decrease in the average advisory fee rate is due to an overall change in the composition of AUM where long-short strategies, which pay a higher advisory fee, made up 32% of total AUM as of September 30, 2010 compared to 39% of total AUM as of September 30, 2009 while long only strategies, which have a lower advisory fee, made up 47% of total AUM as of September 30, 2010 compared to only 39% of total AUM as of September 30, 2009. The Companys average AUM during the quarter ended September 30, 2010 was $6.8 billion compared to $5.1 billion for the quarter ended September 30, 2009. Despite the 0.02% decrease in average advisory fee rate in third quarter 2010, the fee rate was being charged on a greater asset base compared to the same quarter in 2009 resulting in an increase in the overall fees earned during the period.
Compensation and Related Costs. Employee compensation and benefits increased $1.4 million, or 20%, during the three months ended September 30, 2010 compared to the same period a year ago, primarily due to an increase of $670 thousand, or 16%, in incentive compensation during the period consistent with an increase in AUM and the associated increase in operating income. Further contributors to the overall increase in compensation expense were restricted stock expense, which increased by $187 thousand due to an overall increase in the total amount of long-term equity awards outstanding in 2010 compared to 2009, and base salaries and related benefits, which increased by $181 thousand due to an increase in employee headcount.
The Company generated net income of $7,938,585 ($2.88 per diluted share) for the nine months ended September 30, 2010, compared with net income of $7,871,645 ($3.05 per diluted share) for the nine months ended September 30, 2009. While net income experienced an increase of only $67 thousand, revenue for the period increased $11.3 million offset by a $6.4 million increase in compensation and related costs and a decrease in the investment return on the Companys corporate investments by $4.3 million from the nine months ended September 30, 2009 to the nine months ended September 30, 2010. Excluding the investment return, net operating income after tax increased $2.9 million, or 58%, for the period primarily due to a 29% increase in AUM from September 30, 2009 to September 30, 2010.
Mutual Fund Administration Fees. Mutual fund administration fees include administration fees received from Diamond Hill Funds, which are calculated as a percent of average net AUM, and all Beacon Hill fee revenue. Effective April 30, 2010, the administration fee rate for Diamond Hill Funds decreased from 0.34% to 0.30% on Class A and Class C shares and decreased from 0.20% to 0.19% for Class I shares. This decrease represents a sharing of the fund administration economies of scale with mutual fund shareholders. Fund administration revenues increased by $1.5 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 due to a 21% increase in mutual fund AUM, a $227 thousand increase in Beacon Hill revenue, offset by a decrease in the effective blended gross fee rate from 0.28% to 0.26%. Despite the 0.02% decrease in effective blended gross fee rate, the Companys average mutual fund AUM during the nine months ended September 30, 2010 was $3.7 billion compared to $2.8 billion for the nine months ended September 30, 2009. Therefore, the lower effective blended gross fee rate for the nine months ended September 30, 2010 was being charged on a greater asset base compared to the same period in 2009 resulting in an increase in the overall fees earned during the period.
Compensation and Related Costs. Employee compensation and benefits increased $6.4 million, or 37%, during the nine months ended September 30, 2010 compared to the same period a year ago, primarily due to an increase of $4.5 million in incentive compensation during the period consistent with an increase in AUM and the associated increase in operating income. Further contributors to the overall increase in compensation expense were restricted stock expense, which increased by $512 thousand due to an overall increase in the total amount of long-term equity awards outstanding in 2010 compared to 2009, and base salaries and related benefits, which increased by $673 thousand due to an increase in employee headcount.
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Diamond Hill Investment Group Inc. has a market cap of $233.4 million; its shares were traded at around $83.98 with a P/E ratio of 19.9 and P/S ratio of 5.5. The dividend yield of Diamond Hill Investment Group Inc. stocks is 11.8%.DHIL is in the portfolios of Whitney Tilson of T2 Partners Management, LP, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
The Company generated net income of $3,438,406 ($1.24 per diluted share) for the three months ended September 30, 2010, compared with net income of $3,203,918 ($1.23 per diluted share) for the three months ended September 30, 2009. While net income experienced an increase of $230 thousand, revenue for the period increased $2.7 million offset by a $1.4 million increase in compensation and related costs and a decrease in the investment return on the Companys corporate investments by $894 thousand from the nine months ended September 30, 2009 to the nine months ended September 30, 2010. Excluding the investment return, net operating income after tax increased $492 thousand, or 26%, for the period primarily due to a 29% increase in AUM from September 30, 2009 to September 30, 2010.Investment Advisory Fees. Investment advisory fees increased by $2.7 million, or 28%, due to a 29% increase in AUM from September 30, 2009 to September 30, 2010. Investment advisory fees are calculated as a percent of average net AUM at various levels depending on the investment product. The Companys average advisory fee rate for the three months ended September 30, 2010 was 0.72% compared to 0.74% for the three months ended September 30, 2009. The decrease in the average advisory fee rate is due to an overall change in the composition of AUM where long-short strategies, which pay a higher advisory fee, made up 32% of total AUM as of September 30, 2010 compared to 39% of total AUM as of September 30, 2009 while long only strategies, which have a lower advisory fee, made up 47% of total AUM as of September 30, 2010 compared to only 39% of total AUM as of September 30, 2009. The Companys average AUM during the quarter ended September 30, 2010 was $6.8 billion compared to $5.1 billion for the quarter ended September 30, 2009. Despite the 0.02% decrease in average advisory fee rate in third quarter 2010, the fee rate was being charged on a greater asset base compared to the same quarter in 2009 resulting in an increase in the overall fees earned during the period.
Compensation and Related Costs. Employee compensation and benefits increased $1.4 million, or 20%, during the three months ended September 30, 2010 compared to the same period a year ago, primarily due to an increase of $670 thousand, or 16%, in incentive compensation during the period consistent with an increase in AUM and the associated increase in operating income. Further contributors to the overall increase in compensation expense were restricted stock expense, which increased by $187 thousand due to an overall increase in the total amount of long-term equity awards outstanding in 2010 compared to 2009, and base salaries and related benefits, which increased by $181 thousand due to an increase in employee headcount.
The Company generated net income of $7,938,585 ($2.88 per diluted share) for the nine months ended September 30, 2010, compared with net income of $7,871,645 ($3.05 per diluted share) for the nine months ended September 30, 2009. While net income experienced an increase of only $67 thousand, revenue for the period increased $11.3 million offset by a $6.4 million increase in compensation and related costs and a decrease in the investment return on the Companys corporate investments by $4.3 million from the nine months ended September 30, 2009 to the nine months ended September 30, 2010. Excluding the investment return, net operating income after tax increased $2.9 million, or 58%, for the period primarily due to a 29% increase in AUM from September 30, 2009 to September 30, 2010.
Mutual Fund Administration Fees. Mutual fund administration fees include administration fees received from Diamond Hill Funds, which are calculated as a percent of average net AUM, and all Beacon Hill fee revenue. Effective April 30, 2010, the administration fee rate for Diamond Hill Funds decreased from 0.34% to 0.30% on Class A and Class C shares and decreased from 0.20% to 0.19% for Class I shares. This decrease represents a sharing of the fund administration economies of scale with mutual fund shareholders. Fund administration revenues increased by $1.5 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 due to a 21% increase in mutual fund AUM, a $227 thousand increase in Beacon Hill revenue, offset by a decrease in the effective blended gross fee rate from 0.28% to 0.26%. Despite the 0.02% decrease in effective blended gross fee rate, the Companys average mutual fund AUM during the nine months ended September 30, 2010 was $3.7 billion compared to $2.8 billion for the nine months ended September 30, 2009. Therefore, the lower effective blended gross fee rate for the nine months ended September 30, 2010 was being charged on a greater asset base compared to the same period in 2009 resulting in an increase in the overall fees earned during the period.
Compensation and Related Costs. Employee compensation and benefits increased $6.4 million, or 37%, during the nine months ended September 30, 2010 compared to the same period a year ago, primarily due to an increase of $4.5 million in incentive compensation during the period consistent with an increase in AUM and the associated increase in operating income. Further contributors to the overall increase in compensation expense were restricted stock expense, which increased by $512 thousand due to an overall increase in the total amount of long-term equity awards outstanding in 2010 compared to 2009, and base salaries and related benefits, which increased by $673 thousand due to an increase in employee headcount.
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