Diamond Hill Capital, a fund managed by Ric Dillon and his team, has filed their 13F for the end of December. 13F filings disclose many of a fund’s long equity positions at the end of the quarter- meaning that while these stock picks are a little bit out of date, they are quite comprehensive and since they are filed at regular intervals they can be compared over time. Investors can then learn which stocks a fund manager likes and treat it as a free recommendation- review the stock further and buy it if they find that their own research agrees. Here are five of Diamond Hill’s largest stock holdings as of the beginning of 2013 (find more stocks the fund reported owning):
The fund’s top pick as of the beginning of January was Hartford Financial Services Group Inc (NYSE:HIG), with Diamond Hill adding about 1 million shares to its portfolio during the fourth quarter of 2012. Hartford is a property and casualty insurance company with a market cap of nearly $11 billion. That valuation places it at 8 times earnings estimates for this year and at about half the book value of its equity; between those two value metrics, we think it would be worthwhile learning more about the company. Billionaire John Paulson’s Paulson & Co. cut its stake in Hartford during the third quarter of 2012 but still closed September with almost 20 million shares in its portfolio (see Paulson's stock picks).
Diamond Hill sold some shares of Occidental Petroleum Corporation (NYSE:OXY) but the oil and gas company remained one of the fund’s largest holdings. While the 2013 earnings multiple of 11 may seem low, it is actually relatively high compared to many other oil majors such as BP plc (NYSE:BP) and Chevron Corporation (NYSE:CVX). Net income at Occidental was down 22% in Q3 2012 versus a year earlier. D.E. Shaw, a large hedge fund managed by billionaire David Shaw, was another major shareholder at the end of September (check out D.E. Shaw's favorite stocks).
Three more of Diamond Hill's stock picks, including two megabanks: