Diamond Hill Capital (Trades, Portfolio) disclosed this week that its top five buys for the second quarter were VF Corp. (VFC, Financial), Carrier Global Corp. (CARR, Financial), Mondelez International Inc. (MDLZ, Financial), Public Storage (PSA, Financial) and Proctor & Gamble Co. (PG, Financial).
Established in 2000, the Columbus, Ohio-based firm invests in stocks based on fundamental analyses of companies' profitability and market position, financial and competitive position, management quality, valuation and growth components of valuation.
As of the quarter's end, Diamond Hill's (DHIL, Financial) $16.96 billion equity portfolio contains 149 stocks, with 10 new positions and a turnover ratio of 8%. The top four sectors in terms of weight are financial services, consumer cyclical, consumer defensive and health care, representing 26.75%, 14.05%, 12.30% and 11.90% of the equity portfolio.
VF
Diamond Hill purchased 3,052,793 shares of VF, expanding the position 261.67% and the equity portfolio 1.10%. Shares averaged $58.15 during the second quarter.
The Greensboro, North Carolina-based company designs and manufactures branded apparel and accessories through brands like Vans, The North Face and Columbia. GuruFocus ranks the company's profitability 6 out of 10: Profit margins and returns are outperforming over 70% of global competitors despite languishing near 10-year lows. The website also warns that VF's days inventory increased over the trailing 12 months, suggesting deceleration in sales.
Other gurus with holdings in VF include Pioneer Investments (Trades, Portfolio) and Jerome Dodson (Trades, Portfolio)'s Parnassus Endeavor Fund (Trades, Portfolio).
Carrier
Diamond Hill disclosed a stake of 7,236,571 shares in Carrier, dedicating 0.95% of its equity portfolio to the stake. Shares averaged $18.38 during the second quarter.
Along with Otis Worldwide Corp. (OTIS, Financial), Carrier separated on April 3 from United Technologies while the Farmington, Connecticut-based industrial conglomerate merged with Raytheon to from Raytheon Technologies Corp. (RTX, Financial). Carrier manufactures heating, ventilation and air conditioning systems for residential and commercial entities.
Mondelez
Diamond Hill purchased 2,950,571 shares of Mondelez, increasing the position 63.39% and the equity portfolio 0.89%. Shares averaged $51.34 during the second quarter.
The Deerfield, Illinois-based company produces well-known snack brands like Oreos and Chips Ahoy. GuruFocus ranks Mondelez's profitability 6 out of 10: Although the company has expanding operating margins, its three-year revenue growth rate of 2.50% underperforms 52.88% of global competitors.
Public Storage
Diamond Hill purchased 610,679 shares of Public Storage, giving the holding 0.69% weight in the equity portfolio. Shares averaged $193.16 during the second quarter.
The Glendale, California-based REIT owns and operates over 2,300 self-storage facilities in 38 states. GuruFocus ranks Public Storage's financial strength 7 out of 10 on the back of debt ratios outperforming over 90% of global competitors, partially offset by a moderately low Piotroski F-score of 4.
Proctor & Gamble
Diamond Hill purchased 644,487 shares of Proctor & Gamble, increasing the position 27.44% and the equity portfolio 0.45%. Shares averaged $116.42 during the second quarter.
GuruFocus ranks the Cincinnati-based consumer products giant's profitability 7 out of 10: The company's three-year revenue growth outperforms just 56% of global competitors despite a high Piotroski F-score of 7 and expanding operating margins.
Disclosure: Long Proctor & Gamble.
Read more here:
- Ken Fisher's Top 4 Buys in the 2nd Quarter
- Tom Gayner's Top 5 Sells in the 2nd Quarter
- Matthews Japan Fund's Top 5 Trades in the 2nd Quarter
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