Diamond Beneish M Score

DHIL
 Stock
  

USD 173.30  7.10  3.94%   

This module uses fundamental data of Diamond Hill to approximate the value of its Beneish M Score. Diamond Hill M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Continue to Diamond Hill Piotroski F Score and Diamond Hill Altman Z Score analysis.
  
Debt to Equity Ratio is expected to hike to 0.46 this year. Diamond Hill Cash Flow Per Share is relatively stable at the moment as compared to the past year. The company's current value of Cash Flow Per Share is estimated at 9.23. Revenue to Assets is expected to hike to 0.89 this year, although the value of Receivables Turnover will most likely fall to 8.06.
At this time, it appears that Diamond Hill Inv is a possible manipulator. The earnings manipulation may begin if Diamond Hill's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Diamond Hill executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Diamond Hill's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-0.94
Beneish M Score - Possible Manipulator
Elasticity of Receivables1.1Focus
Asset Quality2.36Focus
Expense Coverage1.02Focus
Gross Margin Strengs1.09Focus
Accruals Factor1.02Focus
Depreciation Resistance1.01Focus
Net Sales Growth0.91Focus
Financial Leverage ConditionN/AFocus

Diamond Hill Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Diamond Hill's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues165 M182.2 M
Moderately Down
Increasing
Slightly volatile
Selling General and Administrative Expense23.2 M25.3 M
Significantly Down
Increasing
Slightly volatile
Net Cash Flow from Operations36.4 M26.3 M
Significantly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion1.1 M1.3 M
Fairly Down
Increasing
Slightly volatile
Total Assets256.1 M286.2 M
Moderately Down
Increasing
Slightly volatile
Investments141.7 M166.7 M
Fairly Down
Increasing
Slightly volatile
Property Plant and Equipment Net5.3 M6.1 M
Fairly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables20.4 M20.4 M
Slightly Down
Increasing
Slightly volatile
Total Liabilities72.3 M84 M
Fairly Down
Increasing
Slightly volatile
Current Assets83 M101 M
Significantly Down
Increasing
Slightly volatile
Current Liabilities37.8 M46.6 M
Significantly Down
Increasing
Slightly volatile
Operating Income69.4 M76.3 M
Significantly Down
Increasing
Slightly volatile
Gross Margin0.650.596
Significantly Up
Increasing
Slightly volatile

Diamond Hill Inv Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Diamond Hill's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Diamond Hill in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Diamond Hill's degree of accounting gimmicks and manipulations.

About Diamond Hill Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

1.1 Million

Diamond Hill Depreciation Amortization and Accretion is relatively stable at the moment as compared to the past year. The company's current value of Depreciation Amortization and Accretion is estimated at 1.1 Million

Diamond Hill Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Diamond Hill. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Trade and Non Trade Receivables19.22 M20.29 M17.22 M17.81 M20.44 M20.36 M
Revenues145.2 M145.63 M136.62 M126.39 M182.19 M165 M
Total Assets250.39 M325.73 M272.66 M263.1 M286.15 M256.13 M
Current Assets99.94 M104.72 M114.25 M116.54 M100.99 M82.98 M
Property Plant and Equipment Net4.06 M3.68 M5.73 M6.74 M6.1 M5.29 M
Depreciation Amortization and Accretion888.2 K1.16 M1.16 M992.84 K1.28 M1.1 M
Selling General and Administrative Expense23.34 M20.52 M22.45 M20.34 M25.26 M23.24 M
Total Liabilities57.87 M67.47 M65.63 M69.64 M83.97 M72.31 M
Current Liabilities37.39 M45.08 M35.29 M36.4 M46.63 M37.84 M
Operating Income67 M71.26 M47.94 M45.54 M76.26 M69.37 M
Net Cash Flow from Operations60.92 M28.13 M56.97 M59.77 M26.31 M36.41 M
Investments138.48 M203.49 M139.44 M128.4 M166.66 M141.7 M

About Diamond Hill Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Diamond Hill Inv's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Diamond Hill using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Diamond Hill Inv based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Diamond Hill Investment Group, Inc., through its subsidiary, Diamond Hill Capital Management, Inc., provides investment advisory and fund administration services in the United States. The company was founded in 1990 and is based in Columbus, Ohio. Diamond Hill operates under Asset Management classification in the United States and is traded on NASDAQ Exchange. It employs 128 people.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Diamond Hill without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Diamond Hill

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Diamond Hill position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Diamond Hill will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to Diamond Hill could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Diamond Hill when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Diamond Hill - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Diamond Hill Inv to buy it.
The correlation of Diamond Hill is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Diamond Hill moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Diamond Hill Inv moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Diamond Hill can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Continue to Diamond Hill Piotroski F Score and Diamond Hill Altman Z Score analysis. Note that the Diamond Hill Inv information on this page should be used as a complementary analysis to other Diamond Hill's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Shere Portfolio module to track or share privately all of your investments from the convenience of any device.

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Is Diamond Hill's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Diamond Hill. If investors know Diamond will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Diamond Hill listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.73
Market Capitalization
552.9 M
Quarterly Revenue Growth YOY
-0.13
Return On Assets
0.2
Return On Equity
0.25
The market value of Diamond Hill Inv is measured differently than its book value, which is the value of Diamond that is recorded on the company's balance sheet. Investors also form their own opinion of Diamond Hill's value that differs from its market value or its book value, called intrinsic value, which is Diamond Hill's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Diamond Hill's market value can be influenced by many factors that don't directly affect Diamond Hill's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Diamond Hill's value and its price as these two are different measures arrived at by different means. Investors typically determine Diamond Hill value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Diamond Hill's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.