Citigroup (C) Supplanted Atop Diamond Hill Capital’s Portfolio in Q1

Still Bullish on Medical Device Maker

First established in 2012, Diamond Hill’s stake in Boston Scientific Corporation (NYSE:BSX) was boosted by 3% during the first quarter, to approximately 20.3 million shares worth more than $382 million at the end of March. The medical device maker’s stock has been on a roll this year, ending the May 13 trading session up by 21% year-to-date. Boston Scientific Corporation (NYSE:BSX) released its first quarter results on April 27, and managed to beat analysts’ estimates. The company posted adjusted earnings of $0.28 per share on the back of $1.96 billion in revenue, the latter figure being up by 11% year-over-year. Shares surged by 11% following the report and spiked through the $21.36 level for the first time since the company completed its acquisition of Guidant, dubbed the second-worst deal ever by Fortune magazine back in 2006. David Keidan’s Buckingham Capital Management also holds a position in this stock, totaling 647,088 shares valued at $12.1 million at the end of March.

Struggling Finance Pick

The fund’s management team seems to be bullish on Citigroup Inc (NYSE:C), having increased the size of their investment in the stock by 21% during the first three months of this year. Nonetheless, the holding fell to second spot with the fund’s portfolio in terms of value, as the stock suffered a weak first quarter. The second quarter has been more positive, as despite a 27% year-over-year drop in net income, Citigroup’s first quarter financial results announced on April 15 still managed to beat the market’s expectations. The company posted $17.55 billion in revenue and earnings of $1.10 per share for the quarter, above expectations of $1.05 per share on the back of $17.53 billion in revenue. Citigroup’s management has embarked on a cost-cutting quest and the first results have were shown by way of operating costs falling by 3% during the quarter. Citigroup Inc (NYSE:C) is currently trading at a trailing price-to-earnings ratio of 8.09, which is roughly half the industry average of 15.80 according to Yahoo Finance. Harris Associates, a subsidiary of Natixis Global Asset Management, disclosed a new position in Citigroup Inc (NYSE:C) of 28.7 million shares worth $1.2 billion at the end of March.

New King of the Portfolio

Abbott Laboratories (NYSE:ABT) was Diamond Hill Capital’s number one holding heading into the second quarter. This is also one of the fund’s oldest holdings, first taking up residence in its portfolio at the end of 2004. According to its latest quarterly filing, the fund holds roughly 10.2 million shares of the company as of March 31, up by 18% quarter-over-quarter and worth in excess of $426 million. Abbott Laboratories (NYSE:ABT) recently offered to acquire St. Jude Medical, Inc. (NYSE:STJ), a developer of cardiovascular medical devices, for $25 billion. As is usually the case, Abbott’s stock registered a significant drop shortly after, as arbitrageurs were scrambling to profit from the deal. Before the announcement, Abbott shares were close to level for the year. The deal, which is expected to close by the end of 2016, will help Abbott’s medical device business, a division that was seen as a drag on the company’s growth by a number of analysts, compete with the likes of Medtronic PLC (NYSE:MDT) and Boston Scientific Corporation (NYSE:BSX). Mehdi Mahmud’s First Eagle Investment Management also holds a significant stake in Abbott Laboratories (NYSE:ABT) that amounts to 7.51 million shares valued at $314 million on March 31.

Disclosure: None