Top 10 Stocks to Buy According to Durable Capital Partners

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1. 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 Bearings Incorporated (NYSE:RBC) ranks first on our list of top 10 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.

READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires

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