Why Is Texas Instruments Incorporated (TXN) Among Diamond Hill Capital’s Top Stock Picks?

Insider Monkey2024-12-28

We recently compiled a list of the Diamond Hill Capital’s Top 10 Stock Picks. In this article, we are going to take a look at where Texas Instruments Incorporated (NASDAQ:TXN) stands against Diamond ...

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Mr. Dillon and several members of his team broke off to form VELA Investment Management that year, which led to the addition of Heather Brilliant to the CEO position at Diamond Hill.There’s been relatively little volatility in Diamond Hill’s overall sector allocations over the past year, with finance stocks continuing to account for nearly a quarter of the fund’s 13F","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SG9999003800.SGD":"Nikko AM Global Dividend Equity Acc SGD-H","LU2129689514.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) INC","LU0557290698.USD":"施罗德环球可持续增长基金","LU2413666699.HKD":"BNP PARIBAS GLOBAL ENVIRONMENT \"CRH\" (HKDHDG) INC","LU0345774391.USD":"NINETY ONE GSF AMERICAN FRANCHISE \"A\" (USD) ACC","LU2129689431.USD":"FRANKLIN GLOBAL INCOME \"A\" (USD) ACC","IE0008368304.USD":"STEWART INVESTORS WORLDWIDE LEADERS SUSTAINABILITY FUND \"I\" (USD) ACC","TQQQ":"纳指三倍做多ETF","NVIW.SI":"NVDA 3xLongSG261006","LU2413666426.HKD":"BNP PARIBAS GLOBAL ENVIRONMENT \"C\" (HKD) ACC","QLD":"纳指两倍做多ETF","BK4141":"半导体产品","LU0545039389.USD":"BGF GLOBAL EQUITY INCOME \"A2\" ACC","DHIL":"Diamond Hill Investment Group","LU2129689605.HKD":"FRANKLIN GLOBAL INCOME \"A\" (HKD) INC","USJW.SI":"ALPHAB 3xLongSG261006","BK4561":"索罗斯持仓","BK4581":"高盛持仓","BK4512":"苹果概念","IE00BYQQ9H92.USD":"BNY MELLON GLOBAL LEADERS \"A\" (USD) ACC","LU0345774631.USD":"NINETY ONE GSF AMERICAN FRANCHISE \"A\" (USD) INC","IE00BFXG0V08.USD":"BNY MELLON GLOBAL LEADERS \"B\" (USD) ACC","BK4135":"资产管理与托管银行","LU0661504455.SGD":"Blackrock Global Equity Income A5 SGD-H","LU1721428933.USD":"法巴全球经典环境基金RH MD Dis","LU0314104364.USD":"MANULIFE GF AMERICAN GROWTH \"AA\" (USD) INC","HIL":"希尔国际管理","QID":"纳指两倍做空ETF","SQQQ":"纳指三倍做空ETF","LU1066053197.SGD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM3\" (SGDHDG) INC","LU1046421795.USD":"富达环球科技A-ACC","LU1674673691.USD":"HSBC GIF GLOBAL LOWER CARBON EQUITY \"AD\" (USD) INC","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","BK4554":"元宇宙及AR概念","LU1674673428.USD":"HSBC GIF GLOBAL LOWER CARBON EQUITY \"AC\" (USD) ACC","LU0347712357.USD":"BNP PARIBAS GLOBAL ENVIRONMENT \"C\" (USD) ACC","PSQ":"纳指反向ETF","TSYW.SI":"TESLA 3xLongSG261006","LU1778281490.HKD":"HSBC GIF GLOBAL LOWER CARBON EQUITY \"AD\" (HKD) INC","LU1244550577.SGD":"FTIF - Franklin Global Multi-Asset Income A (Mdis) SGD-H1","LU0738911758.USD":"Blackrock Global Equity Income A6 USD","BK4534":"瑞士信贷持仓","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","TXN":"德州仪器","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","USAW.SI":"AMZN 3xLongSG261006",".IXIC":"NASDAQ Composite"},"translate_title":"为什么德州仪器公司(TXN)是钻石山资本的首选股票之一？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TXN":1,"HIL":1,".IXIC":0.9,"DHIL":0.9,"NVIW.SI":0.6,"PSQ":0.6,"QID":0.6,"QLD":0.6,"SQQQ":0.6,"TQQQ":0.6,"TSYW.SI":0.6,"USAW.SI":0.6,"USJW.SI":0.6,"MNQmain":0.6,"NQmain":0.6},"content_text":"We recently compiled a list of the Diamond Hill Capital’s Top 10 Stock Picks. In this article, we are going to take a look at where Texas Instruments Incorporated (NASDAQ:TXN) stands against Diamond Hill Capital's other stock picks.\nHeather Brilliant’s Diamond Hill Capital is a Columbus, Ohio-based investment management firm founded in 1997 by Ric Dillon, who managed the company until 2019. Mr. Dillon and several members of his team broke off to form VELA Investment Management that year, which led to the addition of Heather Brilliant to the CEO position at Diamond Hill.\nMs. Brilliant earned an MBA from the University of Chicago Booth School of Business, as well as a degree in economics from Northwestern University. She has since accrued more than two decades of experience in the domestic and international investment markets, including nearly 14 years at Morningstar that culminated in her managing the company’s Australasia division, as well as a successful run as CEO, Americas at First State Investments.\nMs. Brilliant has taken major strides to refocus Diamond Hill in her five years at the helm of the company, closing its private asset management division and several of its investment strategies that didn’t align with the fund’s core value investing ethos. Meanwhile, the fund has bulked up its focus on long-term value and fixed income investing by reworking and growing its teams in those disciplines, and adjusting its operational processes and expectations.\nIn a November interview on Bloomberg’s The Close, Ms. Brilliant noted that in the current environment of earnings volatility, her team is focused on uncovering high-quality businesses trading at fair valuations. When asked about her team’s approach to investing in broader sectors experiencing secular tailwinds, specifically the utilities sector, Ms. Brilliant said that while the “story” of power-hungry AI is a good one, she was unconvinced by the valuations in the space, noting that she instead likes some of the pricing trends in the insurance space.\nThat was evidenced by the fund’s large-cap strategy (Q3 investor letter here) adding two big insurance names to its portfolio in Q3, a quarter in which the fund returned 7.84% net of fees, beating the benchmark Russell 1000 Index by 1.76 percentage points. That lifted its year-to-date returns to 14.7% net of fees, ahead of last year’s 13.7% return. The large-cap strategy returned 25.7% in 2021 and 32.2% in 2019.\nThe Diamond Hill Small Cap Fund (Q3 2024 investor letter here) also added some insurance names to its portfolio during Q3 and rattled off a solid quarter of 8.43% gains, though that trailed the benchmark Russell 2000 Index by 84 basis points. The fund has returned just under 10% annually since inception, beating the Russell 2000 by nearly 200 basis points.\nThere’s been relatively little volatility in Diamond Hill’s overall sector allocations over the past year, with finance stocks continuing to account for nearly a quarter of the fund’s 13F portfolio, which was valued at $24.7 billion on September 30, up from $23.4 billion at the end of June. Consumer discretionary, healthcare, and industrials stocks were next at 15.9%, 14.1%, and 13.7% exposure respectively. Tech stocks rounded out the fund’s top 5 sectors at 8.6% exposure.\nOur Methodology\nThe following data is gathered from Diamond Hill Capital’s latest 13F filing with the SEC.\nWhy 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here). That’s why you should pay close attention to this important indicator.\nNote: All hedge fund data is based on the exclusive group of 900+ active funds tracked by Insider Monkey that filed 13Fs for the Q3 2024 reporting period.\n A robotic arm in the process of assembling a complex circuit board - showing the industrial scale the company operates at. \nTexas Instruments Incorporated (NASDAQ:TXN)\nValue of Diamond Hill Capital’s 13F Position (9/30/2024): $642 million\nNumber of Hedge Fund Shareholders (9/30/2024): 60\nShares of Texas Instruments Incorporated (NASDAQ:TXN) have gained 12.9% since the end of March, which coincided with a 15.4% rise in hedge fund ownership of the semiconductor manufacturer during the middle two quarters of 2024. The stock was one of Diamond Hill’s top contributors in Q2 and the fund left its stake largely untouched during Q3, ending the quarter with just over 3.11 million shares.\nTexas Instruments Incorporated (NASDAQ:TXN) is a global leader in the analog chip space, which powers the mechanical heart of many automated machine processes, most notably in the industrial and automotive sectors. Recent volatility in those segments drove the company’s overall revenue down by 8% to $4.15 billion in Q3, while profitability sagged by double digits across several metrics.\nThe company is confident that its current investments centered around boosting 300mm wafer production will pay off in the future, as evidenced by the recent awarding of up to $1.6 billion in funding through the U.S. CHIPS and Science Act. Wells Fargo has a $215 price target and ‘Equal Weight’ rating on TXN shares, citing a lack of visibility into when demand for the company’s chips will reaccelerate.\nThe Diamond Hill Select Strategy likes Texas Instruments Incorporated (NASDAQ:TXN)’s long-term outlook, as revealed in its Q2 2024 investor letter:\n\n“Among our top individual contributors in Q2 were Amazon, Texas Instruments Incorporated (NASDAQ:TXN) and Mr. Cooper Group. Shares of semiconductor manufacturing company Texas Instruments rose in Q2 as demand in several of the company’s end markets show signs of recovering. Given the company’s long-term prospects, competitive positioning and scale advantages, we believe the outlook for the company from here is strong.”\n\nOverall TXN ranks 5th on our list of Diamond Hill Capital's stock picks. While we acknowledge the potential of TXN 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 more promising than TXN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.   \nREAD NEXT: 8 Most Promising Robotics Stocks According to Hedge Funds and 10 Best UK Stocks to Invest in Now   \nDisclosure: None. This article is originally published at Insider Monkey.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2494600093"}