Ric Dillon founded Diamond Hill Capital Management back in 2000 and he currently manages it together with Chuck Bath. The fund uses a bottom-up, fundamental analysis strategy. In the latest round of 13F filings, Diamond Hill revealed an equity portfolio worth around $12.95 billion, up from $12.71 billion held at the end of the second quarter. The portfolio consists of over 140 stocks and is spread across many sectors, with a slight orientation towards Financial companies, which represent around 30% of the portfolio. The fund has made some changes among its top three picks, which are represented by Citigroup Inc (NYSE:C), United Technologies Corporation (NYSE:UTX), and American International Group Inc (NYSE:AIG).
Bullish on Citi
Diamond Hill has significantly increased its position in Citigroup Inc (NYSE:C) during the third quarter. In its latest 13F filing, the fund reported ownership of 6.95 million shares of the financial company, up by some 385,600 shares over the quarter. The stake is valued at $360.14 million, which represent 2.78% of the total equity portfolio. In this way, Citigroup became the largest holding in Diamond Hill’s equity portfolio, climbing from the seventh spot held at the end of June. The stock of Citigroup Inc (NYSE:C) appreciated by around 2.60% year-to-date. The fund has been holding shares of the company since the third quarter of 2012, initially holding 4.58 million shares. The stock gained more than 60% since the fund added it to its equity portfolio.
Citigroup Inc (NYSE:C)’s stock edged down on Wednesday after it was announced that its currency traders have been involved in some foreign-currency market. Several banks, including Citigroup and JPMorgan Chase & Co. (NYSE:JPM) have agreed to pay over $1.0 billion each to settle the allegations. Also a couple of days ago, Citigroup partnered with Apple Inc. (NASDAQ:AAPL) to increase the popularity of Apple Pay among merchants that have resented the new service.
One of the largest shareholders of Citigroup Inc (NYSE:C) is Seth Klarman’s Baupost Group, which owns over 122.57 million shares as of the end of June.
Raises Stake in United Technologies
The second-largest holding in Diamond Hill’s equity portfolio is represented by United Technologies Corporation (NYSE:UTX). The fund added around 235,500 shares of the company during the July-September period and currently owns some 3.26 million shares, worth $344.49 million. United Technologies Corporation (NYSE:UTX) has been the largest holding at the end of the last several quarters. The investor has been a long-term shareholder of the company, while the stocp appreciated by some 40%. Another shareholder of United Technologies is Ken Fisher’s Fisher Asset Management, which owns 8.28 million shares as of the end of September.
United Technologies Corporation (NYSE:UTX) is one of the leaders in the high technology, services for building systems and aerospace industries across the globe. The company is well positioned for long-term growth. For the third quarter, the company reported a 32% EPS growth, which amounted to $2.04. The sales also went up by 5% to $16.2 billion. On the back of good prospects, analysts are also bullish on United Technologies stock, which has a consensus ‘Buy’ rating and a target price of over $123.
Sells Some AIG Shares
While Diamond Hill raised its stakes in the top two holdings, in American International Group Inc (NYSE:AIG) it cut the stake by around 18,700 shares. The fund reported ownership of 6.37 million shares, valued at $344.2 million. Diamond Hill has been holding shares of AIG since the third quarter of 2012, initially reporting ownership of some 2.23 million shares. The fund has raised its stake in the subsequent quarters, while the stock advanced by around 70%.
American International Group Inc (NYSE:AIG) is also a popular investment choice among funds, since the stock has had a steady growth and many investors consider that it will grow further. AIG is one of the largest holdings in Bruce Berkowitz‘s Fairholme and Mr. Berkowitz said during an interview in September that he prefers to invest in American International Group Inc (NYSE:AIG) rather than in six different stocks. He added that AIG is very cheap relative to its intrinsic value. In March, Leon Cooperman of Omega Advisors said that AIG trades at only 80% of its book value, which amounted to $60. Fairholme owned 69.81 million shares of American International Group Inc (NYSE:AIG) at the end of the second quarter, while Omega Advisors held 5.44 million shares.
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