Diamond Hill Select Strategy Exited its Stake in ESAB Corporation (ESAB)

Diamond Hill Capital, an investment management company, released its “Select Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The portfolio appreciated double digits in Q1 outperforming the Russell 3000 Index. The strategy returned 12.66% gross of fees and 12.43% net of fees vs 10.02% for the index. The relative performance of the portfolio concentrated on discretionary, financials, and consumer staples holdings however industrials and healthcare holdings, while positive on an absolute basis, trailed benchmark peers, posing a relative headwind in Q1. Relative performance was also negatively impacted by lack of exposure to the communication services sector. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Diamond Hill Select Strategy highlighted stocks like ESAB Corporation (NYSE:ESAB), in the first quarter 2024 investor letter. ESAB Corporation (NYSE:ESAB) is a fabrication technology and gas control solutions company. The one-month return of ESAB Corporation (NYSE:ESAB) was -11.81%, and its shares gained 45.75% of their value over the last 52 weeks. On June 10, 2024, ESAB Corporation (NYSE:ESAB) stock closed at $95.64 per share with a market capitalization of $5.779 billion.

Diamond Hill Select Strategy stated the following regarding ESAB Corporation (NYSE:ESAB) in its first quarter 2024 investor letter:

"Other bottom contributors included WESCO International and ESAB Corporation (NYSE:ESAB). Shares of welding and cutting equipment and consumables provider ESAB, which were effectively flat in the quarter, took a pause to consolidate 2023 gains which left the stock less undervalued than it had been. We accordingly exited our position to redeploy our capital into more attractively valued opportunities."

A welder wearing protective gear and goggles, completing a welding job in a modern factory.

ESAB Corporation (NYSE:ESAB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held ESAB Corporation (NYSE:ESAB) at the end of the first quarter which was 23 in the previous quarter. While we acknowledge the potential of ESAB Corporation (NYSE:ESAB) 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 ESAB Corporation (NYSE:ESAB) and shared Alphyn Capital Management's views on the company. In addition, please check out our hedge fund investor letters Q1 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.