At its web site, Diamond Hill Capital (Trades, Portfolio) Management calls itself “an independent investment management firm headquartered in Columbus, Ohio.”
In its summary of its investment philosophy, Diamond Hill writes, “We focus on the fundamentals of intrinsic value, which are far less volatile than market price, and our actions are ultimately dictated by the price to intrinsic value relationship.”
That seems to work pretty well. In the last five years, Diamond Hill’s average annual return has been 18.3%. Since its inception in 2000, its average annual return has been better than 12%.
In the third quarter, Diamond Hill Capital (Trades, Portfolio) bought two stocks that are new to its portfolio – Goodyear Tire & Rubber Co (GT, Financial) and Stryker Corporation (SYK, Financial).
The firm bought 3,182,158 shares of Goodyear, a tire manufacturer based in Ohio, for an average price of $25.67 per share. The purchase had a 0.55% impact on the firm’s portfolio.
Diamond Hill also bought 425,344 shares of Stryker, a Michigan-based medical technology company, for an average price of $82.29. That transaction had a 0.27% impact on the portfolio.
The company added to its existing stakes in 29 companies –Twenty-First Century Fox Inc (FOX, Financial), Abbott Laboratories (ABT, Financial), Juniper Networks Inc (JNPR, Financial), Alere Inc (ALR, Financial), Cimarex Energy Co (XEC, Financial), Praxair Inc (PX, Financial), International Business Machines Corp (IBM, Financial), Devon Energy Corp (DVN, Financial), TJX Companies (TJX, Financial), Willis Group Holdings PLC (WSH, Financial), United Technologies Corp (UTX, Financial), Pfizer Inc (PFE), Jarden Corp (JAH), Citigroup Inc (C), Boston Scientific Inc (BSX), Parker Hannifin Corp (PH), Whirlpool Corp (WHR), Kimberly-Clark Corp (KMB), Brown & Brown Inc (BRO), Post Holdings Inc (POST), Aircastle Ltd (AYR), Hub Group Inc (HUBG), Live Nation Entertainment Inc (LYV), Fortress Investment Group LLC (FIG), Aaron's Inc (AAN), Molson Coors Brewing Co (TAP), Contango Oil & Gas Co (MCF), State Bank Financial Corp (STBZ) and SunTrust Banks Inc (STI).
Diamond Hill’s purchase of 2,445,959 shares of Twenty-First Century Fox, a New York-based mass media company, for an average price of $33.42 per share had an impact of 0.63% on the firm’s portfolio.
The additions to Diamond Hill’s holdings in Abbott Laboratories, a North Chicago-based pharmaceuticals and healthcare products company, and Juniper Networks, a California-based manufacturer of networking equipment, each had a 0.38% impact on Diamond Hill’s portfolio.
Diamond Hill purchased 1,202,099 shares of Abbott for an average price of $42.32 per share.
The company bought 2,207,861 shares of Juniper Networks for an average price of $23.45 per share.
Divestitures and reductions
Diamond Hill sold all its holdings in nine companies – Bank of New York Mellon Corp (BK), WGL Holdings Inc (WGL), KeyCorp (KEY), General Mills Inc (GIS), Air Products & Chemicals Inc (APD), ConAgra Foods Inc (CAG), Quest Diagnostics Inc (DGX), Liquidity Service Inc (LQDT) and Southwest Airlines Co (LUV).
The divestiture of 2,497,295 shares of General Mills, a food products company based in Minnesota, for an average price of $52.47 per share had a -1% impact on the firm’s portfolio.
Diamond Hill reduced its holdings in seven companies – Dollar General Corp (DG), Medtronic Inc (MDT), McDonald's Corp (MCD), Occidental Petroleum Corp (OXY), Avis Budget Group Inc (CAR), GlaxoSmithKline PLC (GSK) and XPO Logistics Inc (XPO).
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