Diamond Hill Capital, an investment management company, released its “Large Cap Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Despite inconsistent Q4 gains, markets ended the year positively. The portfolio trailed the Russell 1000 Index benchmark in Q4 and 2024. In Q4, the strategy returned -2.27% (net) vs 2.75% returns for the index and in 2024 the strategy returned 12.06% (net) vs 24.51% returns for the index. To get an idea of the fund’s best choices for 2024, check out its top 5 positions.
In its fourth quarter 2024 investor letter, Diamond Hill Large Cap Strategy emphasized stocks such as Builders FirstSource, Inc. (NYSE:BLDR). Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. The one-month return of Builders FirstSource, Inc. (NYSE:BLDR) was -6.25%, and its shares lost 38.84% of their value over the last 52 weeks. On March 20, 2025, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $128.76 per share with a market capitalization of $14.63 billion.
Diamond Hill Large Cap Strategy stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its Q4 2024 investor letter:
“Other bottom contributors in Q4 included Builders FirstSource, Inc. (NYSE:BLDR), Extra Space Storage and SBA Communications. Lumber and building materials distributor Builders FirstSource’s revenue continues to be impacted by on going weakness in its multi-family segment and weaker than-expected single-family home construction. Dollar value of materials supplied per home has also declined, but this trend has largely stabilized. Positively, gross margin continues to hold up strongly despite these macro challenges.”
A crane lifting a truss during the construction of a new building.
Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the fourth quarter which was 55 in the previous quarter. Builders FirstSource, Inc.’s (NYSE:BLDR) fourth quarter sales were $3.8 billion, a decrease of 8% compared to Q4 2023. While we acknowledge the potential of Builders FirstSource, Inc. (NYSE:BLDR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Builders FirstSource, Inc. (NYSE:BLDR) and shared the list of undervalued stocks to invest in according to Goldman Sachs. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.