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.

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.