Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q2, markets saw a modest increase, providing favorable results in most regions and nations. In the quarter the strategy lagged the Russell Midcap Index. The relative weakness was mostly concentrated in the industrial holdings, which underperformed their index counterparts. Another area of relative weakness came from holdings in utilities and consumer discretionary. On the other hand, holdings in health care and materials were comparatively strong. The strategy returned -4.39% (gross) and -4.56% (net) in the quarter vs -3.35% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
Diamond Hill Mid Cap Strategy highlighted stocks like Labcorp Holdings Inc. (NYSE:LH) in the second quarter 2024 investor letter. Labcorp Holdings Inc. (NYSE:LH) is a laboratory services company that operates through the Diagnostics Laboratories and Biopharma Laboratory Services segments. The one-month return of Labcorp Holdings Inc. (NYSE:LH) was 8.04%, and its shares gained 8.92% of their value over the last 52 weeks. On August 26, 2024, Labcorp Holdings Inc. (NYSE:LH) stock closed at $230.19 per share with a market capitalization of $19.328 billion.
Diamond Hill Mid Cap Strategy stated the following regarding Labcorp Holdings Inc. (NYSE:LH) in its Q2 2024 investor letter:
“Despite rising valuations, we continue finding attractively valued, quality companies the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. In Q2, we introduced new positions in Sysco Corporation, Civitas Resources, Labcorp Holdings Inc. (NYSE:LH) and VeriSign.
Labcorp is a leading US diagnostic lab operating in a duopolistic market that is steadily growing. Labcorp has a strong competitive position in the lab market with significant scale that is difficult for new entrants to replicate. Its diagnostics business continues growing, driven by M&A and increasing utilization. We believe the company is making smart decisions with respect to its acquisitions and divestitures and capitalized on what we consider an attractive valuation to initiate a position in a high-quality company with an attractive growth outlook.”
A scientist wearing a lab coat, surrounded by vivid blue-themed biopharmaceutical equipment in a research laboratory.
Labcorp Holdings Inc. (NYSE:LH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Labcorp Holdings Inc. (NYSE:LH) at the end of the second quarter which was 36 in the previous quarter. During the second quarter, Labcorp Holdings Inc.’s (NYSE:LH) revenue amounted to $3.2 billion, marking a 6.2% increase from the previous year. This growth can be attributed primarily to organic base business growth and the impact of acquisitions. While we acknowledge the potential of Labcorp Holdings Inc. (NYSE:LH) 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 Labcorp Holdings Inc. (NYSE:LH) and shared Diamond Hill Large Cap Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.
