Diamond Hill Capital, an investment management company, released its “Large Cap Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. Although there was some volatility, markets contributed to strong year-to-date gains in Q3. US stocks increased by 6%, as measured by the Russell 3000 Index, with small- and mid-cap equities accounting for most gains. This is a significant change. The strategy outperformed the Russell 1000 Index in Q3 and returned 7.84% (net) vs 6.08% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
Diamond Hill Large Cap Strategy highlighted stocks like Builders FirstSource, Inc. (NYSE:BLDR) in the third quarter 2024 investor letter. 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 -3.40%, and its shares gained 30.73% of their value over the last 52 weeks. On November 22, 2024, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $178.52 per share with a market capitalization of $20.545 billion.
Diamond Hill Large Cap Strategy stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its Q3 2024 investor letter:
“We continue finding compelling new ideas, even as the bull market proceeds. In Q3, we initiated three new positions in Aon, Accenture and Builders FirstSource, Inc. (NYSE:BLDR). Builders FirstSource (BFS) is the US’s leading lumber and building materials distributor. As new single-family housing construction increases to meet high demand and low supply, we believe BFS is well-positioned to benefit — particularly as prefabricated products increasingly penetrate the construction industry. BFS also offers innovative digital solutions, which should differentiate it from competitors and help it continue taking market share. We expect the company to make accretive acquisitions and possibly to buy back shares — both of which should enhance shareholder value over the long run.”
A crane lifting a truss during the construction of a new building.
Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the third quarter which was 59 in the previous quarter. Builders FirstSource, Inc.’s (NYSE:BLDR) third quarter sales were $4.2 billion, a decrease of 6.7% compared to Q3 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 best-performing S&P 500 stocks in the last 3 years. In addition, please check out our hedge fund investor letters Q3 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.