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Diamond Hill Capital's Top Five Holdings

February 05, 2014 | About:
Monica Wolfe

Monica Wolfe

131 followers
Over the past quarter Diamond Hill Capital added seven new stocks to its portfolio, bringing the total number of stocks to 152 valued at $10.96 billion. The fund manages five long-only equity strategies, three alternative equity strategies and a fixed income strategy.

The following five companies represent Diamond Hill Capital’s five largest stock holdings as of the close of the fourth quarter.

United Technologies (UTX)

Diamond Hill’s largest position goes to United Technologies where the fund also holds 2.9% of its portfolio. Diamond Hill owns 2,817,985 shares of UTX, representing 0.31% of the company’s shares outstanding.

Over the fourth quarter Diamond Hill increased their holdings by 2.18%. The fund purchased 60,172 shares in the third quarter price range of $102.76 to $113.80, with an estimated average quarterly price of $108.30. Since then the price per share has gone up about 0.7%.

Diamond Hill’s historical holding history:

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United Technologies provides high technology products and services to the building systems and aerospace industries worldwide.

United Technologies’ historical revenue and net income:

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The analysis on UTX reports that the company’s dividend yield is near a 5-year low, they have shown predictable revenue and earnings growth and its operating margin has been expanding. The company’s price is also sitting near its 10-year high of $109.58.

The Peter Lynch Chart suggests that the company is currently overvalued:

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United Technologies has a market cap of $100.11 billion. Its shares are currently trading at around $109.10 with a P/E ratio of 15.60, a P/S ratio of 1.60 and a P/B ratio of 3.70. UTX also currently offers a dividend yield of 2.00%. The company had an annual average earnings growth of 9% over the past ten years.

GuruFocus rated UTX the business predictability rank of 2-star.

Medtronic (MDT)

Diamond Hill’s largest holding is in Medtronic where the fund holds on to 5,272,970 shares. This holding represents 2.8% of the fund’s total assets managed and 0.52% of the company’s shares outstanding.

Over the duration of the fourth quarter Diamond Hill made a reduction in holdings of -0.76%. The fund sold a total of 40,615 shares in the price range of $52.46 to $58.84, with an estimated average quarterly price of $56.70 per share. Since then the price per share has dropped about -3.6%.

Diamond Hill’s holding history of Medtronic:

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Medtronic is engaged in providing medical technology which is used for alleviating pain, restoring health and extending life for people. The Company develops, manufactures, and markets its medical devices. Its products include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders and musculoskeletal trauma, etc.

Medtronic’s historical revenue and net income:

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The analysis on Medtronic reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding and its price is nearing a 10-year high. The company has also issued $411 million of debt over the past three years but its debt level is acceptable.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Medtronic has a market cap of $54.74 billion. Its shares are currently trading at around $54.83 with a P/E ratio of 14.50, a P/S ratio of 3.30 and a P/B ratio of 3.00. The company had an annual average earnings growth of 7.60% over the past ten years.

GuruFocus rated Medtronic the business predictability rank of 4-star.

American International Group (AIG)

The fund’s fourth largest position is in American International Group where they hold on to 6,019,303 shares. Their position represents 2.8% of their total portfolio and 0.41% of the company’s shares outstanding.

During the fourth quarter Diamond Hill increased their position in American International 1.74% by selling a total of 72,313 shares of the company’s stock. They sold these shares in the price range of $47.30 to $52.30, with an estimated average quarterly price of $49.84 per share. Since their decrease in holdings the price per share has increased about 8%.

Diamond Hill’s holding history as of the third quarter:

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AIG is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. The company's four reportable segments are as follows: General Insurance, Domestic Life Insurance & Retirement Services, Foreign Life Insurance & Retirement Services and Financial Services.

AIG’s historical revenue and net income:

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The analysis on AIG reports that the dividend yield is at a 10-year low and that the company’s revenue has been in decline over the past five years.

The Peter Lynch Chart suggests that the company is currently overvalued:

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American International Group has a market cap of $70.11 billion. Its shares are currently trading at around $47.62 with a P/E ratio of 22.60, a P/S ratio of 1.11 and a P/B ratio of 0.70.

Citigroup (C)

The third largest holding goes to Citigroup where the fund held on to 5,704,638 shares of the company’s stock. This position represents 2.7% of their total portfolio as well as 0.19% of the company’s shares outstanding.

Over the past quarter the fund increased their holdings 2.14% over the past quarter, purchasing 119,681 shares. They bought these shares near the average quarterly price of $50.61 per share, and since then the price per share has dropped approximately -7.6%.

Diamond Hill Capital (Trades, Portfolio)’s historical holding history:

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Citigroup is a global financial services holding company, whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking, credit cards, corporate and investment banking, securities brokerage and wealth management.

Citigroup’s historical revenue and net income:

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The analysis reports that the company’s dividend yield is near a 2-year low

Occidental Petroleum (OXY)

The fund’s fifth largest position goes to Occidental Petroleum where they hold on to 3,150,589 shares of the company’s stock. This position represents 2.7% of their total portfolio and 0.39% of the company’s shares outstanding.

During the third quarter Diamond Hill upped their stake by a slight 1.93%. The fund purchased a total of 59,640 shares in the price range of $90.21 to $99.37, with an estimated average quarterly price of $95.30. Since then the price per share has decreased about -8.2%.

Diamond Hill’s historical holding history:

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Occidental Petroleum is an international oil and gas exploration and production company and is o one of the largest in the US, based on equity market cap. The company’s subsidiary, OxyChem, is a major North American chemical manufacturer.

Occidental Petroleum’s historical revenue and net income:

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The analysis on Occidental Petroleum reports that the company’s revenue has slowed down over the past year, its operating margin has been in a 5-year decline and its price is nearing a 2-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Occidental Petroleum has a market cap of $70.5 billion. Its shares are currently trading at around $87.46 with a P/E ratio of 15.30, a P/S ratio of 2.80 and a P/B ratio of 1.70. Occidental also currently holds a dividend yield of 2.50%. The company had an annual average earnings growth of 10.30% over the past ten years.

GuruFocus rated Occidental Petroleum the business predictability rank of 2-star.

Check out Diamond Hill Capital’s complete third quarter portfolio here.

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