By Matt Andrejczak, CBS.MarketWatch.com
WASHINGTON (CBS.MW) - Tom Schindler eyes situations where a company's stock falls below what he thinks the underlying business is worth to investors down the road.
"We don't let the stock market tells us what the stock is worth," Schindler said.
The Diamond Hill Small Cap Fund /zigman2/quotes/203131214/realtime DHSCX -1.57% is up 27.18 percent year-to-date versus a 13.27 percent increase for the S&P 500. Over the past year, the fund has risen 22 percent vs. a 9 percent rise in the S&P. Since inception in December 2000, the fund has an annualized return of 15.87 percent. The $7.2 million fund has a front-load of 5.75 percent and an expense ratio of 1.5 percent.
His first pick, Greenbrier /zigman2/quotes/202409815/composite GBX -1.78% is breaking out of slump with a record backlog of 12,000 railroad cars valued at $630 million, said Schindler. The pickup is swinging Greenbrier back into profitability. The company reported a profit of $1 million for the nine months ending May 31 vs. a loss of $23.8 million the prior fiscal period. Shares of Greenbrier finished a penny lower at $13.94 on Thursday.
The next pick, Brinks /zigman2/quotes/203540504/composite BCO +0.09% is the "class of the industry" when it comes to home protection systems, Schindler said, who considers the conglomerate's growing subscriber base a bright spot for the company moving forward.
He added that the stock would benefit if the company sold its cost-intensive freight shipping business. Brinks recently agreed to sell its gas and timber unit for $119 million. Shares of Brinks closed up $1.20 to $16.44 on Thursday.
He expects his final pick, vacation property management firm ResortQuest International , to regain strength as travel fears subside over the military campaign in Iraq and the SARS (severe acute respiratory syndrome) virus. ResortQuest, which rents over 20,000 condos, homes, and villas in the U.S. and Canada, lost $13.5 million in 2002. The stock, which recently hit a 52-week high, closed 9 cents lower at $4.82 on Thursday.