Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The strategy returned 10.42% net in the fourth quarter compared to a 9.18% return for the Russell Midcap Index, and in 2022, it returned -13.12% compared to a -17.32% return for the benchmark. The strategy outperformed the Russell Midcap Index in the fourth quarter and the calendar year. Holdings in information technology, consumer staples, and materials outperformed and contributed to the strategy’s relative performance. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Diamond Hill Mid Cap Strategy highlighted stocks like Regal Rexnord Corporation (NYSE:RRX) in its Q4 2022 investor letter. Headquartered in Beloit, Wisconsin, Regal Rexnord Corporation (NYSE:RRX) manufactures motors, bearings, gearing, conveying, blowers, electric components, and couplings globally. On February 15, 2023, Regal Rexnord Corporation (NYSE:RRX) stock closed at $161.89 per share. One-month return of Regal Rexnord Corporation (NYSE:RRX) was 22.17%, and its shares gained 2.70% of their value over the last 52 weeks. Regal Rexnord Corporation (NYSE:RRX) has a market capitalization of $10.709 billion.
Diamond Hill Mid Cap Strategy made the following comment about Regal Rexnord Corporation (NYSE:RRX) in its Q4 2022 investor letter:
“Bottom contributors in Q4 included Regal Rexnord Corporation (NYSE:RRX), First Republic Bank and SVB Financial. We initiated a position in RRX, a designer and manufacturer of industrial powertrain solutions, power transmission components and other specialty electronics, in Q3 2022. In Q4, RRX announced a large all-cash acquisition — a move investors seemingly saw as risky given the uncertain macroeconomic environment. However, we believe the announced acquisition of Altra Industrial Motion is a strategic fit that could dramatically increase the size of RRX’s best business and provide meaningful opportunities for cost and revenue synergies. We expect RRX to be able to manage the resulting leverage efficiently as it generates strong free cash flow. With shares trading at a significant discount to our estimate of intrinsic value, we see RRX as a compelling opportunity, poised to benefit from secular tailwinds tied to an increasing focus on energy efficiency, automation, reshoring and electrification.”
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Regal Rexnord Corporation (NYSE:RRX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Regal Rexnord Corporation (NYSE:RRX) at the end of the third quarter, which was 38 in the previous quarter.
We discussed Regal Rexnord Corporation (NYSE:RRX) in another article and shared the list of best small cap AI stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2022 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.
