In this article, we will take a detailed look at Joe DiMenna’s Stock Portfolio: Top 10 Stocks to Buy.
Zweig-DiMenna Associates Inc. is a U.S.-based hedge fund with a legacy spanning four decades. Established in 1984 by Joseph A. DiMenna and Martin Zweig, the firm specializes in absolute return investing. Its strategies encompass fundamental long/short equities and global macro approaches, positioning it among the longest-running hedge funds in the industry. DiMenna serves as the Managing Director and Chief Investment Officer, overseeing the firm’s partnerships and investment funds.
DiMenna’s initiation into the financial world began as a college student in 1977 when he became a research assistant for renowned investor Martin Zweig. A keen student of stock markets since his early teens, DiMenna had been an avid reader of financial newsletters, particularly Zweig’s highly regarded The Zweig Forecast. He earned a B.S. in Finance from Fairfield University’s Dolan School of Business in 1980. Beyond his work in finance, he has contributed to various organizations, serving on the boards of the Harlem Children’s Zone, Orchestra of St. Luke’s, The Brearley School, The Gilder Lehrman Institute of American History, and the New York Historical Society.
Zweig, a Ph.D. in finance, was known for his data-driven market analysis and the development of key investor sentiment indicators, including the Put/Call ratio. His well-known investment maxims, such as “Don’t fight the Fed” and “Don’t fight the tape,” significantly influenced DiMenna’s approach. Their professional relationship began when DiMenna, impressed by Zweig’s insights, reached out to him with market ideas and a request for a college recommendation. This correspondence led to his recruitment as a research assistant, a role that involved extensive data analysis, often delving into market trends spanning over 50 years. Zweig remained a key figure in DiMenna’s career until his passing in 2013.
After graduating in 1980, DiMenna continued working with Zweig, refining market research techniques and stock selection strategies. He took on editorial responsibilities for a stock-focused newsletter and co-developed a mutual fund trading business based on market timing principles. By 1983, DiMenna proposed leveraging their expertise to launch a hedge fund, a relatively rare venture at the time, with fewer than ten such funds in existence. In 1984, they established the first Zweig-DiMenna partnership, followed by the launch of Zweig-DiMenna International Limited in 1987. Their approach combined long/short equity investing with macroeconomic risk management. DiMenna led the stock selection and investment process, while Zweig focused on broader market conditions, shaping strategies that DiMenna implemented.
The fund quickly gained prominence for its strong returns. In 1999, BusinessWeek recognized DiMenna as “one of the best stock-pickers no one has ever heard of,” highlighting the fund’s impressive 15-year annualized return of 25% after fees, significantly outperforming the broader market’s 18.6% annualized total return.
DiMenna’s achievements earned him several accolades. In 2002, the National Foundation for Teaching Entrepreneurship named him “Entrepreneur of the Year” for his contributions to financial education. The Zweig-DiMenna International hedge fund won Absolute Return Magazine’s “U.S. Equity Fund of the Year” award in 2007 after delivering an 82.25% annual return, far surpassing industry peers. In 2008, Alpha Magazine ranked DiMenna 13th on its list of top moneymakers, citing his $450 million earnings in 2007 and his fund’s consistent double-digit annual returns between 2002 and 2007.
Speedcurve Performance Analytics
Our Methodology
The stocks discussed below were picked from Zweig-DiMenna Associates’ Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Joe DiMenna’s Stock Portfolio: Top 10 Stocks to Buy
10. Everest Group, Ltd. (NYSE:EG)
Number of Hedge Fund Holders as of Q4: 47
Zweig-DiMenna Associates’ Equity Stake: $28.96 Million
Everest Group, Ltd. (NYSE:EG) is a well-established global reinsurance and specialty insurance provider with a strong underwriting discipline and a focus on long-term intrinsic value growth. With expertise spanning business process services, engineering services, IT services, technology, and sourcing in the regions of North America, Latin America, Europe, and Asia, the company delivers research-backed strategies that drive growth and resilience. It benefits from its scale, risk management expertise, and ability to capitalize on industry cycles, positioning it for sustained profitability.
The stock of Everest Group, Ltd. (NYSE:EG) is currently undervalued compared to industry peers, with a P/E ratio of 10.59 and a P/B ratio of 1.03, both below sector averages. Its forward P/E of 6.64 indicates strong earnings growth potential, while historical valuation trends support its discounted status. Although its combined ratio spiked to 135.5% in Q4 2024 due to reserve adjustments, the company’s long-term profitability remains stable. Return on equity reached 18.8% in 2023 before slightly dipping to 17.9% in 2024, reflecting continued financial strength. Investment income contributed 13.6% of earned premiums, further reinforcing stability. A DCF analysis estimates its intrinsic value between $1,684 and $2,534 per share, with a substantial margin of safety, making EG an attractive investment with strong growth potential.
Zweig-DiMenna Associates owns 79,909 shares of Everest Group, Ltd. (NYSE:EG) as of Q4 2024, with a total value of $28.96 million, representing 2.16% of DiMenna’s portfolio. Insider Monkey’s database indicated that 47 hedge funds held stakes in the company as of the end of Q4 2024, with a total value of $1.17 billion, as opposed to 35 funds in Q3.
Vulcan Value Partners stated the following regarding Everest Group, Ltd. (NYSE:EG) in its Q4 2024 investor letter:
“We purchased one new position during the quarter: Everest Group, Ltd. (NYSE:EG). Everest Group is a global reinsurance and insurance business known for its disciplined cost structure and high quality underwriting. Insurance is an inherently cyclical business. “Hard markets” occur when premium prices are high relative to insured risks. Hard markets inevitably attract more capital to the industry, causing premium prices to fall relative to insured risks, which results in a “soft market.” Soft markets lead undisciplined underwriters to post underwriting losses, removing capital from the industry, and the cycle repeats. In evaluating insurance companies, we believe that growth in tangible book value per share more closely approximates growth in intrinsic value per share than does growth in earnings per share. Compounding book value per share requires underwriting discipline. Moreover, given the cyclical nature of the business, a disciplined underwriter will have more volatile earnings in the short run than an undisciplined underwriter. Everest Group underwrites aggressively in hard markets and builds underwriting capacity during soft markets. During the most recent hard market, the company has significantly grown book value per share. We applaud Everest Group’s emphasis on growing intrinsic value per share over the long term instead of managing short-term earnings per share. We first purchased Everest Group, then called Everest Re, in our Small Cap portfolio where we held it for over thirteen years. It grew into a large cap company, and we owned it in our Large Cap portfolio for over ten years. We are pleased to be able to add Everest Group to our Focus portfolio with a margin of safety to our estimate of intrinsic value.”
9. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders as of Q4: 92
Zweig-DiMenna Associates’ Equity Stake: $34.66 Million
Vertiv Holdings Co (NYSE:VRT) is a global leader in providing critical infrastructure solutions for data centers, communication networks, and industrial environments. By integrating hardware, software, analytics, and continuous support services, the company ensures that its customers’ essential operations remain uninterrupted and perform at peak efficiency. With a comprehensive portfolio spanning power, cooling, and IT infrastructure, Vertiv addresses key industry challenges, offering solutions that extend from cloud computing to the edge of the network. Headquartered in Westerville, Ohio, the company operates in over 40 countries with a workforce of approximately 31,000 employees and maintains regional hubs in Italy, the United States, the Philippines, China, and India.
In Q4 2024, Vertiv Holdings Co (NYSE:VRT) reported strong financial performance, achieving $2.35 billion in net sales, a 25.8% increase from the previous year. The company’s operating profit rose by 60% to $457 million, showcasing operational efficiency and improved margins. Earnings per share surged to $0.99, marking a 77% increase from Q4 2023 and surpassing analyst projections by 20%. These impressive results highlight the company’s strong market position and continued expansion.
As of Q4 2024, Zweig-DiMenna Associates significantly increased its position in Vertiv Holdings Co (NYSE:VRT) to 305,075 shares, marking a 10% rise from 278,450 shares in Q3. This is a relatively new stock in the portfolio as Zweig-DiMenna Associates first purchased its shares in the quarter ended 31st March 2024 and the hedge fund has been steadily increasing its stake in the company ever since Q1 2024. This stake is now valued at approximately $34.66 million, making Vertiv Holdings Co (NYSE:VRT) the 9th most valuable company in Joe DiMenna’s portfolio. Insider Monkey’s database indicated that 92 hedge funds held stakes in the company as of the end of Q4 2024, with a collective value of nearly $3.45 billion, as opposed to 91 funds in Q3.
