We recently published a list of Top 10 Stocks to Buy According to Durable Capital Partners. In this article, we are going to take a look at where RBC Bearings Incorporated (NYSE:RBC) stands against other top stocks to buy according to Durable Capital Partners.
Durable Capital Partners is a Maryland-based hedge fund management firm founded in the second quarter of 2019 by Henry Ellenbogen. The firm primarily follows a long-term equity investment strategy, with a focus on early-stage and durable growth in small- and mid-cap equities across public markets. Ellenbogen, who serves as the Managing Partner and Chief Investment Officer, leads the firm’s investment approach.
Ellenbogen established Durable Capital Partners in 2019 and currently holds the roles of Managing Partner and Chief Investment Officer. Before founding Durable, he spent nearly two decades at T. Rowe Price Associates, Inc., where he served as Vice President and Chief Investment Officer for U.S. Equity Growth. During his tenure, he led the U.S. Small-Cap Growth Equity Strategy and managed the New Horizons Fund. Additionally, he was an active member of the U.S. Equity Steering Committee and the Corporate Governance Committee for U.S. Equity.
Between 2001 and 2019, Ellenbogen spearheaded private market investments in several high-profile companies. His leadership at the New Horizons Fund contributed to its recognition with multiple industry awards. Notably, the fund received Investor’s Business Daily’s Best Mutual Funds Award in 2018 across categories such as U.S. Diversified Equity Funds, Growth Funds, and Small-Cap Funds. Additionally, it earned the Thomson Reuters Lipper Fund Award for Best Small-Cap Growth Fund over a ten-year period (2017), a five-year period (2016), and both five- and ten-year periods (2013). Prior to his investment career, Ellenbogen served as Chief of Staff for U.S. Representative Peter Deutsch and gained experience as a Summer Associate at Goldman Sachs.
Academically, he graduated magna cum laude from Harvard College with a degree in History and Science. He later earned a J.D. from Harvard Law School and an MBA from Harvard Business School, where he was recognized as a Baker Scholar. Additionally, he has taught as an adjunct professor at New York University’s Graduate School of Politics. Ellenbogen is a member of the Barron’s Roundtable and contributes to the Investment Committee of the Smithsonian Institution. He also serves as Chairman of the Board for The Posse Foundation.
According to its most recent 13F filing for the fourth quarter of 2024, Durable Capital Partners reported $12.26 billion in managed 13F securities, with its top 10 holdings accounting for 47.59% of its portfolio.
Our Methodology
The stocks discussed below were picked from Durable Capital Partners’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A skilled machinist inspecting a precision bearing for a aerospace/defense application.
RBC Bearings Incorporated (NYSE:RBC)
Number of Hedge Fund Holders as of Q4: 22
Durable Capital Partners’ Equity Stake: $787.14 Million
A manufacturer and distributor of precision bearings and related products used in aircraft and mechanical systems, RBC Bearings Incorporated (NYSE:RBC)’s product portfolio includes plain bearings, roller bearings, ball bearings, and engineered components. For the third quarter of fiscal 2025, which ended on December 28, 2024, the company reported adjusted earnings of $2.34 per share, surpassing the consensus estimate of $2.20. This marks a 26.5% increase compared to the previous year’s adjusted earnings of $1.85 per share, driven by revenue growth.
The company generated $394.4 million in revenue for the quarter, reflecting a 5.5% year-over-year increase, though slightly below the consensus estimate of $401 million. At the end of the quarter, RBC Bearings Incorporated (NYSE:RBC) reported a backlog of $896.5 million, up from $864 million at the end of the second quarter of fiscal 2025.
RBC Bearings Incorporated (NYSE:RBC) operates in two primary segments: Aerospace/Defense and Industrial. In the third quarter, Industrial segment revenue reached $143.2 million, accounting for 63.7% of total revenue and reflecting a 2.7% year-over-year increase. The Aerospace/Defense segment contributed $149.1 million, or 36.3% of total revenue, representing a 10.8% increase from the previous year.
Looking ahead, the company projects fiscal fourth-quarter net sales between $434 million and $444 million, signaling a year-over-year growth of 4.9% to 7.3% compared to $413.7 million in the same period last year.
Overall, RBC ranks 1st on our list of top stocks to buy according to Durable Capital Partners. While we acknowledge the potential for RBC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RBC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
