DHIL

Diamond Hill ($DHIL) Director Bets Big With $230,000 Stock Purchase Amid Sharp Price Drop, Despite 20% Q1 Profit Decline

05/06/2025 13:06

Diamond Hill Investment Group ($DHIL) Director Richard Cooley has been aggressively purchasing company shares following a significant stock price decline, drawing market attention. According to SEC filings, Cooley acquired 1,000 shares ($124,500) on April 30, 692 shares ($88,230) on May 1, and 124 shares ($15,996) on May 2. These purchases were made at an average price of approximately $126 per share, representing a substantial discount from the $145 level seen just a month earlier. These recent acquisitions continue Cooley's consistent buying pattern established earlier this year. Between February 28 and March 31, he purchased a total of 1,422 shares (approximately $200,000), and in December, he acquired 1,000 shares ($152,250). Notably, his purchasing activity has primarily occurred during periods of stock price weakness. Diamond Hill reported its Q1 2025 earnings on April 29. The company generated revenue of $37.1 million, but net income fell to $10.4 million, representing a 20% decrease compared to the same period last year. Earnings per share (EPS) dropped significantly to $3.77 from $4.62 in Q1 2024. While the operating margin was reported at 35%, overall profitability declined to 28% from 36% in the previous year's first quarter. This disappointing performance had an immediate impact on the stock price. $DHIL closed at $125.98 on April 30, following the earnings announcement, reflecting approximately a 15% decline from its March levels. Cooley's substantial purchases coincided precisely with this downturn. Diamond Hill is a small-cap company with a market capitalization of approximately $380 million, specializing in investment advisory and fund administration services. While the company achieved 11% revenue growth for the full year 2024, it has begun showing signs of growth deceleration and profitability deterioration in Q1 2025. Historically, Diamond Hill's board members have demonstrated strategic trading patterns aligned with stock price movements. Director James F. Laird Jr. sold over 12,000 shares (approximately $2 million) in November 2024 alone, when the stock was trading around $165-$170, about 30% higher than current levels. CEO Heather Brilliant also purchased 550 shares (approximately $77,000) in June last year during a period of stock price weakness. Following her purchases, the stock steadily climbed until November 2024, recording a maximum gain of about 25% during this period. Cooley's recent actions suggest that as an insider, he may view the current stock price as undervalued relative to the company's intrinsic value. Notably, the shares purchased on May 1 represent a restricted stock award that will vest on April 29, 2026, contingent upon his continued service as a director. The broader U.S. market has been showing signs of instability due to concerns about the Trump administration's tariff policies and inflation worries, though early May has brought some recovery signals. Diamond Hill's stock price has also rebounded to $131.41 on May 2, representing approximately a 5% recovery from late April lows. Despite its profitability challenges, Diamond Hill has maintained its quarterly dividend of $1.50 per share, scheduled for payment on June 13. The current dividend yield of approximately 4.6% may be viewed positively by investors, signaling the company's commitment to shareholder returns despite its recent earnings setback.

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