Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the strategy outperformed the Russell Midcap Index. The strategy returned 9.74% (gross) and 9.55% net of fees vs 8.60% for the index. As the economy and profit growth remained strong, equity markets continued their upward trend in Q1. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
Diamond Hill Capital Mid Cap Strategy highlighted stocks like Regal Rexnord Corporation (NYSE:RRX), in the first 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 -13.06%, and its shares lost 3.56% of their value over the last 52 weeks. On June 6, 2024, Regal Rexnord Corporation (NYSE:RRX) stock closed at $140.14 per share with a market capitalization of $9.322 billion.
Diamond Hill Capital Mid Cap Strategy stated the following regarding Regal Rexnord Corporation (NYSE:RRX) in its first quarter 2024 investor letter:
“On an individual holdings’ basis, top contributors to return in Q1 included Regal Rexnord Corporation (NYSE:RRX). Designer and manufacturer of industrial powertrain solutions, power transmission components and other specialty electronics Regal Rexnord is capitalizing on merger synergies and its commitment to focusing on its most productive areas to improve margins and drive organic growth faster than peers. While the company’s leverage is somewhat elevated, possibly exposing it to any macroeconomic weakness, recent strong free cash flow generation has helped it make progress deleveraging. We believe Regal Rexnord remains well-positioned to benefit from secular tailwinds such as the increased focus on energy efficiency, automation, re-shoring and electrification in the period ahead.”
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 billionaire Leon Cooperman’s. In its Q1 2023 investor letter, Diamond Hill’s Large Cap Strategy highlighted Regal Rexnord Corporation (NYSE:RRX) and viewed it as a strong long-term possibility. In addition, please check out our hedge fund investor letters Q1 2024 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.
