Here’s Why Sterling Bancorp (STL) Became Diamond Hill Small Cap’s Top Contributor

Diamond Hill Capital, an investment management firm, published its “Diamond Hill Small Cap Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. The portfolio outpaced the Russell 2000® Index in the quarter with positive absolute results across all sectors. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Diamond Hill Capital, in its Q1 2021 investor letter, mentioned Sterling Bancorp (NYSE: STL), and shared their insights on the company. Sterling Bancorp is a Montebello, New York-based bank holding company that currently has a $5.1 billion market capitalization. Since the beginning of the year, DEO delivered a 47.27% return, extending its 12-month gains to 141.17%. As of May 21, 2021, the stock closed at $26.48 per share.

Here is what Diamond Hill Capital has to say about Sterling Bancorp in its Q1 2021 investor letter:

Sterling Bancorp, our largest holding, focuses on building relationships with small and middle-market companies in the Long Island market that larger banks tend to overlook. Sterling also appears to be astute in making acquisitions and allocating capital, having executed well on three larger acquisitions since 2013 and opportunistically repurchasing shares, all while investing in technology necessary to meet clients’ changing demands.”

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Our calculations show that Sterling Bancorp (NYSE: STL) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Sterling Bancorp was in 20 hedge fund portfolios, compared to 19 funds in the fourth quarter of 2020. STL delivered a 25.20% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.