Here’s What This Big Value Investor Has Been Buying and Selling: Liquidity Services, Inc. (LQDT), Diamond Foods, Inc. (DMND)

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.

Liquidity Services, Inc. (NASDAQ:LQDT)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.

Finally, Diamond Hill’s biggest closed positions included Amgen, Inc. (NASDAQ:AMGN) and Fluor Corporation (NEW) (NYSE:FLR) . Heavy construction and industrial specialist Fluor is trading near a 52-week high, and its P/E ratio is a bit above  its five-year average, with free cash flow having dropped  some in recent years. Thus, it doesn’t look quite as bargain-licious as many other stocks, right now. Still, there are promising long-term factors, such as sound ethics and global economic softness, that will reverse at some point.

We should never blindly copy any investor’s moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. Therefore, 13-F forms can be great places to find intriguing candidates for our portfolios.

The article Here’s What This Big Value Investor Has Been Buying and Selling originally appeared on Fool.com and is written by Selena Maranjian.

Longtime Fool contributor Selena Maranjian, whom you can follow on Twitterowns shares of Apple. The Motley Fool recommends Apple and Liquidity Services. The Motley Fool owns shares of Apple, Fluor, and Huntington Bancshares.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!