Here’s What Boosted Gates Industrial Corporation plc (GTES) in Q2

Diamond Hill Capital, an investment management company, released its “Small-Mid Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q2, the market surged uniformly for the rest of the quarter following a sharp decline in April due to President Trump’s “Liberation Day” tariffs announcement. The portfolio returned 5.60% (gross) and 5.37% (net) compared to an 8.59% return for the Russell 2500 Index. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Diamond Hill Small-Mid Cap Fund highlighted stocks such as Gates Industrial Corporation plc (NYSE:GTES). Gates Industrial Corporation plc (NYSE:GTES) manufactures and distributes engineered power transmission and fluid power solutions. The one-month return of Gates Industrial Corporation plc (NYSE:GTES) was -3.07%, and its shares gained 43.25% of their value over the last 52 weeks. On August 11, 2025, Gates Industrial Corporation plc (NYSE:GTES) stock closed at $23.68 per share, with a market capitalization of $6.1 billion.

Diamond Hill Small-Mid Cap Fund  stated the following regarding Gates Industrial Corporation plc (NYSE:GTES) in its second quarter 2025 investor letter:

“Other top contributors in Q2 included Regal Rexnord, Mr. Cooper Group and Gates Industrial Corporation plc (NYSE:GTES). Gates Industrial, an engineered power transmission and fluid power solutions provider, benefited as it produces in and for North America — mitigating what otherwise could have been direct tariff impacts. As more production is expected to shift to the US and Mexico, Gates Industrial stands to benefit.”

A factory worker in a safety vest tightening a V-belt on a power transmission assembly.

Gates Industrial Corporation plc (NYSE:GTES) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Gates Industrial Corporation plc (NYSE:GTES) at the end of the first quarter, which was 39 in the previous quarter. In the second quarter, Gates Industrial Corporation plc (NYSE:GTES) reported  $884 million in total sales, representing a 0.6% decline on core basis. While we acknowledge the risk and potential of Gates Industrial Corporation plc (NYSE:GTES) 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 Gates Industrial Corporation plc (NYSE:GTES) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Gates Industrial Corporation plc (NYSE:GTES) and shared The London Company Small Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 2025 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.