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Diamond Hill Capital Update and Top Three

May 14, 2013 | About:
Sally Jones

Sally Jones

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Founded in year 2000, Diamond Hill Capital Management lists assets under management of $10.7 billion, as of April 30, 2013. Independent and publicly owned, Diamond Hill is listed on Nasdaq (DHIL) and included in the Russell 2000 Index. Led by Corporate CEO Ric Dillon, Diamond Hill manages five long-only equity strategies, three alternative equity strategies and a fixed income strategy. Here's an update on Diamond Hill Capital’s top three holdings and how those companies are performing in the first quarter of 2013:

No. 1: Hartford Financial Services Group Inc. (HIG), Weighting: 3.1%, Shares Owned: 11,269,662, Value: $290 million

Diamond Hill Capital holds 2.58% of shares outstanding of its top holding, Hartford Financial Services Group, Inc. (HIG). Diamond Hill’s trading history shows that it first bought the insurance stock in the third quarter of 2008, purchasing 13,290 shares at an average price of $60.84 for a 50.9% loss. Since that time, the first quarter of 2009 was the highest gain quarter of 174.2%. Diamond Hills most recent quarter trading is first quarter of 2013 when the company sold 360,081 shares at an average price of $24.66 for a gain of 21.2%.

Up 58% over 12 months, the Hartford Financial Services Group Inc. has a market cap of $13.54 billion, and a P/S of 0.47. Hartford is a diversified insurance and financial services company. The dividend yield of Hartford Financial Services Group Inc. stocks is 1.30%.

The current share price is $30.34, compared to valuations here:

1368554945312.pngHIG data by GuruFocus.com

Hartford Financial Services Group Inc. its first quarter 2013 reported core earnings of $456 million, or $0.92 per diluted share, up 7% from $426 million, or $0.87 per diluted share, for the three months ended March 31, 2012 (first quarter 2012). The company also adjusted its fiscal 2013 core earnings outlook upward by $75 million to $1.45 billion to $1.55 billion.

No. 2: Medtronic Inc. (MDT), Weighting: 3%, Shares Owned: 6,060,438, Value: $284.5 million

Diamond Hill Capital holds 0.60% of shares outstanding of its second top holding, Medtronic Inc. (MDT). Diamond Hill’s trading history shows that it first bought the medical device manufacturer stock in the second quarter of 2008, purchasing 844,736 shares at an average price of $49.85 for a 0.3% loss.

Since that time, the first quarter of 2009 was the highest gain quarter of 52.5%. Diamond Hills most recent trading is first quarter of 2013 when the company added 776,920 shares at an average price of $45.49 for a gain of 9.2%.

Up 30% over 12 months, Medtronic Inc. was founded in 1949 and was incorporated as a Minnesota corporation in 1957. Medtronic Inc. has a market cap of $50.07 billion; its shares were traded at around $49.79 with a P/E ratio of 14.09 and P/S ratio of 3.10. The dividend yield of Medtronic Inc. stocks is 2.10%. Medtronic Inc. had an annual average earnings growth of 6.7% over the past 10 years. GuruFocus rated Medtronic Inc. The business predictability rank of 3.5-star.

Last fall GuruFocus reported that Medtronic's growth prospects benefited from market share gains in the Drug-eluting Stent (DES) business, with the launch of the Resolute Integrity stent. The company’s focus on opportunities in China is also a factor in improving long-term potential.

The current share price is $49.79, compared to valuations here:

1368555178793.pngMDT data by GuruFocus.com

Medtronic reported financial results for its third quarter of fiscal year 2013, which ended Jan. 25, 2013, with worldwide third quarter revenue of $4.027 billion, an increase of 4% on a constant currency basis after adjusting for a $41 million foreign currency impact, or a 3% increase as reported. The company’s third quarter net earnings and diluted earnings per share on a non-GAAP basis were $946 million and $0.93, an increase of 7% and 11%, respectively, over the same period in the prior year. Third quarter net earnings were $988 million, or $0.97 per diluted share, an increase of 6% and 10%, respectively, over the same period in the prior year, the company said.

No. 3: United Technologies Corp (UTX), Weighting: 2.9%, Shares Owned: 3,001,765, Value: $280.4 million

Diamond Hill Capital holds 0.33% of shares outstanding of its third top holding, United Technologies Corporation. Diamond Hill’s trading history shows that it first bought the stock in the second quarter of 2008, purchasing 496,520 shares at an average price of $70.76 for a gain of 34.2%.

Since that time, the first quarter of 2009 was the highest gain quarter of 107.5%. Diamond Hill’s most recent trading is first quarter of 2013 when the company sold 97,724 shares at an average price of $89.54 for a gain of 6%.

Up 25% over 12 months, United Technologies Corporation was incorporated in Delaware in 1934. United Technologies Corporation has a market cap of $86.84 billion; its shares were traded at around $95.71 with a P/E ratio of 14.30 and a P/S ratio of 1.45. The dividend yield of United Technologies Corp stocks is 2.20%. United Technologies Corp had an annual average earnings growth of 9.1% over the past 10 years.

GuruFocus rated United Technologies Corp the business predictability rank of 2.5-star.

The current share price is $95.71, compared to valuations here:

1368555595078.pngUTX data by GuruFocus.com

United Technologies reported first quarter 2013 earnings of $1.39 per share versus $1.31 in the same quarter one year ago. The company’s total revenue for the first quarter 2013 grew 16% year-over-year to $14.4 billion.

Diamond Hill Capital Management Inc. is a registered investment adviser based in Columbus, Ohio. According to the updated portfolio report, Diamond Hill Capital lists 139 stocks, 10 of them new, and a total value of $9.5 billion with a quarter-over-quarter turnover of 8%. The Diamond Hill portfolio is heavily weighted with stocks in the financial services sector at 27.1%, followed by healthcare for 14.3% and consumer defensive investments at 14%.

Diamond Hill Capital uses a disciplined, intrinsic value-based approach to investing, while maintaining a long-term perspective.



Here is the complete portfolio of Diamond Hill Capital.

Also check out:

1. Diamond Hill Capital's Undervalued Stocks

2. Diamond Hill Capital's Top Growth Companies

3. Diamond Hill Capital's High Yield stocks

4. Stocks that Diamond Hill Capital keeps buying

Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Diamond Hill Capital.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.3/5 (6 votes)

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