Diamond Hill Capital, an investment management company, released its “Select Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q2, markets saw a modest boost, delivering positive returns across the majority of regions and nations. The Russell 3000 Index showed a +3% increase in US stocks; however, the majority of the gains came from large-cap stocks, which increased by about +4%. Returns were negative across the cap spectrum, with mid-caps and small caps, as indicated by their respective Russell indices, each down about -3%. The portfolio underperformed the Russell 3000 Index in Q2 and returned -4.96% net of fees compared to 3.22% for the index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Diamond Hill Select Strategy highlighted stocks like Regal Rexnord Corporation (NYSE:RRX), in the second quarter 2024 investor letter. Regal Rexnord Corporation (NYSE:RRX) manufactures and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air-moving products, and specialty electrical components and systems. The one-month return of Regal Rexnord Corporation (NYSE:RRX) was 18.38%, and its shares lost 4.24% of their value over the last 52 weeks. On July 30, 2024, Regal Rexnord Corporation (NYSE:RRX) stock closed at $158.46 per share with a market capitalization of $10.541 billion.
Diamond Hill Select Strategy stated the following regarding Regal Rexnord Corporation (NYSE:RRX) in its Q2 2024 investor letter:
“Among our bottom individual Q2 contributors were Lear Corporation and Regal Rexnord. Shares of electric motors and power transmission components manufacturer Regal Rexnord Corporation (NYSE:RRX) were pressured against a backdrop of macroeconomic concerns which are seemingly making investors hesitant to own leveraged cyclical companies like RRX. However, we maintain our conviction in the outlook for RRX and believe that over the long term, it will capitalize on merger synergies to improve margins, increase organic growth and generate meaningful free cash flow, which should allow it to deleverage.”
A technician inspecting a specialized industrial machinery in an engineering lab.
Regal Rexnord Corporation (NYSE:RRX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Regal Rexnord Corporation (NYSE:RRX) at the end of the first quarter which was 33 in the previous quarter. While we acknowledge the potential of Regal Rexnord Corporation (NYSE:RRX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Regal Rexnord Corporation (NYSE:RRX) and shared the list of best manufacturing stocks to buy according to analysts. Regal Rexnord Corporation (NYSE:RRX) contributed to the performance of Diamond Hill Capital in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
