We recently published a list of Billionaire Ken Fisher’s 10 Industrial Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Regal Rexnord Corporation (NYSE:RRX) stands against other billionaire Ken Fisher’s industrial stock picks with huge upside potential.
The economy strongly influences industrial stocks, which have fallen during recent downturns. However, 2025 looks like a key year for this sector, with these companies working in manufacturing, shipping, and aerospace, and investors are now focusing on businesses that adapt quickly to global shifts. The industrial sector grew 26% in 2024, showing strength despite high inflation and weak global demand. Going into 2025, these stocks are getting more attention thanks to new growth drivers and better economic conditions.
Even with possible higher tariffs under Trump’s trade policies, the outlook remains positive. President Trump has proposed a 25% tariff on steel and aluminum from countries like South Korea, Vietnam, and Canada. These tariffs might raise costs and also boost U.S. infrastructure and manufacturing spending; as Canada’s Innovation Minister Francois-Philippe Champagne said,
“Canadian steel and aluminum support key industries in the U.S., from defense, shipbuilding, and auto. We will continue to stand up for Canada, our workers, and our industries.”
All in all, this trade shift could help American industrial companies, especially those bringing supply chains back home.
Moreover, lower interest rates should help the sector by increasing construction and housing projects in 2025. On the other hand, falling mortgage rates will attract more homebuyers, creating demand for building materials and equipment. Ken Fisher said, “Investors are ignoring some of these positive developments,” pointing to an overlooked chance in housing-related businesses.
Aerospace is also making a comeback through airlines’ need to replace aging planes, driving demand for maintenance and parts, which demonstrates significant progress in aerospace-based companies. Meanwhile, only 25% of the $1.9 trillion in planned North American infrastructure projects have started construction, suggesting big growth ahead for equipment providers and construction companies.
In 2025, industrial stocks look promising due to clean technology and automation advancements. As reported in Deloitte’s 2025 Manufacturing Industry Outlook, over $31 billion went into clean-tech manufacturing facilities in 2024, showing a move toward sustainability. With decreasing interest rates and high demand for environmentally friendly tech, these investments are highly probable to drive growth in the industry. Ken Fisher noted made the following comment about the current situation:
“The fear is bigger than the problem can be. Single-period stock market comparisons are always iffy, but it may well be this goes something like the 1998 stock market correction leading to a 26% annual return.”
His view suggests a more positive review of the industrial sector, predicting it will grow despite tariff concerns. With investments in automation, clean tech, and domestic production, these stocks have strong long-term potential even with short-term challenges.
Methodology
To compile this list, we reviewed Ken Fisher’s SEC Q4 2024 13F filings. We picked 10 stocks with the highest upside potential from their current levels as of time of writing this article. Finally, we ranked the stocks in ascending order based on their highest analyst upside potential while also outlining hedge fund sentiment regarding these stocks, as per Insider Monkey’s database of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician inspecting a specialized industrial machinery in an engineering lab.
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.
Overall, RRX ranks 2nd on our list of billionaire Ken Fisher’s industrial stock picks with huge upside potential. While we acknowledge the potential of RRX, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RRX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.