Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.
Today, let's look at Diamond Hill Capital Management, founded in 2000, and based in Ohio. It has explained that:
Our research is predominantly a bottom-up process beginning with fundamental analysis of a company's profitability and market position, financial and competitive position, management quality, valuation, and growth components of valuation.
Like other value-oriented investors respected by The Motley Fool, Diamond Hill seeks undervalued investments and margins of safety.
The company's reportable stock portfolio totaled $8.7 billion in value as of December 31, 2012.
Interesting developments So what does Diamond Hill's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are The Progressive Corporation (NYSE:PGR) and The TJX Companies, Inc. (NYSE:TJX). Other new holdings of interest include online auctioneer Liquidity Services (NASDAQ:LQDT) , which is also a Motley Fool Stock Advisor recommendation. With a relatively capital-light business model and solid profit margins , it specializes in surplus, wholesale, and salvage assets, and has been enjoying double-digit revenue and earnings growth over the past five years. Bears worry about slowing growth and competition, though. The company just reported its first-quarter results , and they featured revenue up 15%, earnings per share up 11%, and lowered expectations for 2013, due to economic uncertainty.
Among holdings in which Diamond Hill increased its stake was Apple Inc. (NASDAQ:AAPL) . Many are panicking, or at least worrying, about Apple, as it's trading near $450 per share from a 52-week high near $700. It recently reported sales that were somewhat disappointing, and shrinking margins, as well. Still, the quarter featured profits of $13 billion, along with 28% more iPhones, and 48% more iPads sold than in the year-earlier period. That's not too shabby, and some think the stock is now a bargain.
Diamond Hill reduced its stake in lots of companies, including Diamond Foods, Inc. (NASDAQ:DMND) and Huntington Bancshares Incorporated (NASDAQ:HBAN) . Diamond Foods had a tough 2012, losing out on a bid for Pringles, and having to restate financial results, among other challenges. Diamond has negative free cash flow and negative net income, along with meager cash and rising debt; therefore, you should delve deeply into the company before investing in it. It may turn itself around, but it seems to have some work to do.
Huntington Bancshares, meanwhile, has been aggressively reducing its loan-loss provisions, while its business has been growing, thanks to talented management. Its 2.3% dividend yield might not be tantalizing, but it was quadrupled in 2011, and the company does sport a lot of room to grow – organically and via acquisitions. Its CEO recently bought nearly $300,000 worth of shares, too, which is a bullish sign.