Fund Manager Picks for Large-Cap Value Funds
What's the best way to stock a large-cap value fund?
Diamond Hill Investment Group portfolio manager Bill Dierker runs a fund that's up 6.5 percent year to date and 16 percent over three years. He likes Cardinal Health,preferring it to competitors McKesson and AmerisourceBergenbecause of "a much more attractive business mix." Dierker says "it has the lowest exposure to health care pharmaceutical distribution, and I think that's a business most people have worries about."
Although he favors Cardinal based on valuation, he likes American International Group for exactly the opposite reason.
"The valuation has really collapsed over the last seven years," he says, adding the stock has now reached "an attractive entry point for a company that can grow their earnings high single digits over the next five years, and probably see a pretty nice in the multiple over that period of time."
Dierker owns Cardinal Health through his fund and personally owns AIG.