Regal Rexnord Corp (RRX) Fell After Reporting Quarterly Results

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund returned -9.41% (gross) and -9.64% (net), compared to a -11.12% return for the Russell 2000 Growth Index. There was a broad positive sentiment in the market at the beginning of 2025. Expectations for a pro-business and soft regulatory environment lifted global markets in January. However, delays and uncertainties surrounding U.S. policies led to a significant downturn in March. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Regal Rexnord Corporation (NYSE:RRX). Regal Rexnord Corporation (NYSE:RRX) is a global manufacturer of 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 1.03%, and its shares gained 2.44% of their value over the last 52 weeks. On June 23, 2025, Regal Rexnord Corporation (NYSE:RRX) stock closed at $141.01 per share, with a market capitalization of $9.354 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Regal Rexnord Corporation (NYSE:RRX) in its Q1 2025 investor letter:

“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, equipment enabling automation & efficiency improvements, or essential infrastructure services. Regal Rexnord Corporation (NYSE:RRX) is engaged in engineering and manufacturing of factory automation subsystems, industrial powertrain solutions, mechanical power transmission components, and air moving products. Its shares dropped -26% after fourth quarter results came up short of estimates. Forward guidance factors in macroeconomic uncertainties including tariffs and regulations.”

Regal Rexnord Corporation (RRX): Among Billionaire Ken Fisher’s Industrial Stock Picks with Huge Upside Potential

A technician inspecting a specialized industrial machinery in an engineering lab.

Regal Rexnord Corporation (NYSE:RRX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Regal Rexnord Corporation (NYSE:RRX) at the end of the first quarter, which was 34 in the previous quarter. Regal Rexnord Corporation’s (NYSE:RRX) organic sales increased by 0.7% on a year-over-year basis (see the details here). 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 undervalued AI stock set for massive gains.

In another article, we covered Regal Rexnord Corporation (NYSE:RRX) and shared Diamond Hill Large Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of RRX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.