Billionaire Ken Fisher’s 10 Industrial Stock Picks with Huge Upside Potential

2. Regal Rexnord Corporation (NYSE:RRX) 

Number of Hedge Fund Holders: 34

Upside Potential: 59.55%

Regal Rexnord Corporation (NYSE:RRX) delivers sustainable solutions in power transmission, automation, and motion control across North America, Asia, Europe, and other global markets. Operating through Industrial Powertrain Solutions, Automation, Motion Control, and Power Efficiency Solutions segments, the company provides a broad range of components such as gearboxes, motors, variable speed controls, and automation subsystems. Regal Rexnord Corporation (NYSE:RRX) serves industries including metals and mining, energy, HVAC, aerospace, robotics, and medical equipment, positioning it as one of the industrial stocks with significant upside potential due to its diversified end-market exposure.

For the quarter ended December 31, 2024, Regal Rexnord Corporation (NYSE:RRX) posted adjusted earnings per share of $2.34, up 2.6% year-over-year, despite a 1.4% decline in organic sales. The company achieved a Q4 adjusted EBITDA margin of 21.7% and generated $185 million in adjusted free cash flow. Full-year debt reduction efforts were notable, with $938 million paid down, exceeding management’s targets. Segment-wise, the Automation and Motion Control business saw positive order momentum in food and aerospace markets, while Power Efficiency Solutions benefited from robust residential HVAC growth.

Moreover, Regal Rexnord Corporation (NYSE:RRX) continued advancing strategic initiatives, achieving $101 million in annual synergies and forming a new partnership with Honeywell Aerospace focused on the emerging eVTOL aircraft market. Despite persistent headwinds in general industrial markets and customer pushouts at year-end, daily orders grew by 4.4% in Q4 and remained positive in January 2025, indicating underlying demand stability. Management expects Q1 2025 to be the low point for sales and margins, followed by sequential improvements through the year.

Looking ahead, Regal Rexnord Corporation (NYSE:RRX) is forecasting flat organic sales growth and an adjusted EBITDA margin of 23% for 2025, with adjusted EPS guidance ranging from $9.60 to $10.40. Ken Fisher owns approximately $59.7 million worth of shares in Regal Rexnord Corporation, representing about 0.02% of his total portfolio, reflecting his conviction in the company’s long-term growth strategy.