Regal Rexnord Corporation (RRX) Demonstrated Robust Performance Amid Uncertainties

Diamond Hill Capital, an investment management company, released its “Large Cap Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. After a significant decline in April following President Trump’s “Liberation Day” tariffs announcement, markets recovered and increased consistently for the remainder of the quarter. The strategy modestly trailed the Russell 1000 Value Index in the second quarter and returned 2.87% (net) vs 3.79% for the index. The financial and consumer discretionary holdings lagged, while healthcare and communication services outperformed, boosting overall performance. To get an idea of the fund’s best choices for 2025, check out its top 5 positions.

In its second-quarter 2025 investor letter, Diamond Hill Large Cap Fund 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 -7.16%, and its shares lost 8.10% of their value over the last 52 weeks. On August 7, 2025, Regal Rexnord Corporation (NYSE:RRX) stock closed at $141.01 per share, with a market capitalization of $9.359 billion.

Diamond Hill Large Cap Fund stated the following regarding Regal Rexnord Corporation (NYSE:RRX) in its second quarter 2025 investor letter:

“Among our top individual contributors in Q2 were Regal Rexnord Corporation (NYSE:RRX) and Texas Instruments. Power transmission components manufacturer Regal Rexnord has held up well against an uncertain macroeconomic backdrop. Merger synergies, its 80/20 growth initiative and continuous improvement efforts are driving strong margin improvement and better-than-expected organic growth. While somewhat elevated leverage could leave the company vulnerable to further near-term macroeconomic weakness, we believe Regal Rexnord’s self-help initiatives should contribute to ongoing margin improvement and organic growth faster than peers’, which we don’t believe the current share price reflects.”

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. While we acknowledge the risk and potential of Regal Rexnord Corporation (NYSE:RRX) 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 Regal Rexnord Corporation (NYSE:RRX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Regal Rexnord Corporation (NYSE:RRX) and shared the list of cheap mid-cap stocks to add to your portfolio. 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.