DHIL

Diamond Hill Investment Group($DHIL) Director Consistently Buys After 27% Stock Decline - Insider Confidence Despite Profit Drop?

05/01/2025 18:16

Small-cap asset management firm $DHIL (Diamond Hill Investment Group) has seen board member Richard Cooley purchase an additional 1,000 shares at $124.50 per share on April 30, 2025. This purchase is particularly noteworthy as it came immediately after the company's Q1 earnings release on April 29, and at a time when the stock has declined approximately 20% over the past five months. Cooley has consistently accumulated $DHIL shares throughout 2025. His purchasing pattern shows remarkable consistency: 272 shares at $144 on February 28, 500 shares at $146 on March 5, another 500 shares at $144 on March 12, 50 shares at $143.50 on March 21, and 100 shares at $142.50 on March 31. Including the April 30 purchase, Cooley has acquired a total of 2,422 shares worth approximately $330,000 this year alone. This buying behavior stands in stark contrast to other insiders' actions in late 2024. In November 2024, when $DHIL's share price reached 52-week highs of $165-170, director James F. Laird Jr. sold a total of 12,000 shares (worth approximately $2.03 million) across three transactions, while directors Nicole St. Pierre and Paula Meyer each sold 300 shares. While multiple directors were selling near the stock's peak, Cooley has been systematically buying during the subsequent decline. Diamond Hill reported its Q1 2025 results on April 29, posting revenue of $37.1 million and EPS of $3.77. While revenue increased 2.3% year-over-year, net income fell 20% to $10.4 million. The company maintained a robust operating margin of 35%, though its profit margin declined from 36% to 28% compared to the previous year. Based in Columbus, Ohio, Diamond Hill provides investment advisory and fund administration services. The company's financial position remains sound with minimal leverage (debt-to-equity ratio of just 3.72%) and strong liquidity with $25.14 million in cash. The stock trades at a P/E ratio of 8.65, significantly below industry averages, suggesting potential undervaluation. The broader U.S. market has experienced mixed investor sentiment due to tariff policies and disappointing jobs reports. In early April, tariffs imposed by the Trump administration triggered a 1.7% drop in the U.S. dollar and precipitated a sell-off in U.S. stocks. During this volatile period, $DHIL's share price declined sharply from $138.28 on April 3 to $129.17 by April 8, and further to $125.49 by April 21. Against this backdrop, Director Cooley's persistent buying may signal confidence in the company's intrinsic value. His April 30 purchase at $124.50 represents a roughly 27% discount from the November 2024 peak of approximately $170. It's worth noting that this latest purchase is a restricted stock award representing director compensation, which will vest on April 29, 2026, contingent upon continued service as a director. $DHIL currently offers an attractive dividend yield of 4.76%, which may appeal to income-focused investors. The company also enjoys high institutional ownership of 69%, indicating confidence from sophisticated investors. However, the recent decline in net income and profit margins warrants careful monitoring. The future trajectory of $DHIL's stock will likely depend on broader trends in the asset management industry and the company's efforts to improve operational efficiency. If Diamond Hill can effectively manage rising costs and restore profitability, the current price might represent an attractive entry point. Director Cooley's consistent buying pattern seems to support this possibility.

You can receive notifications when news is published.