Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The market added robust year-to-date gains in Q3. The portfolio underperformed the Russell Midcap Index in the quarter. The relative weakness is concentrated primarily among materials holdings. The strategy returned 8.53% (gross) and 8.34% (net) in the quarter compared to 9.21% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
Diamond Hill Mid Cap Strategy highlighted stocks like Regal Rexnord Corporation (NYSE:RRX), in the third quarter 2024 investor letter. 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 -2.49%, and its shares gained 49.54% of their value over the last 52 weeks. On November 13, 2024, Regal Rexnord Corporation (NYSE:RRX) stock closed at $172.15 per share with a market capitalization of $11.401 billion.
Diamond Hill Mid Cap Strategy stated the following regarding Regal Rexnord Corporation (NYSE:RRX) in its Q3 2024 investor letter:
“On an individual holdings basis, top contributors to return in Q3 included Regal Rexnord Corporation (NYSE:RRX), NVR and CubeSmart. Power transmission components manufacturer Regal Rexnord benefited from encouraging signs its automation and HVAC markets may be improving. While the company’s leverage remains somewhat elevated — leaving it potentially vulnerable to further macroeconomic weakness — its cash flow has been strong, allowing it to make some progress toward debt pay-down. We believe the market continues undervaluing the potential for merger synergies and the opportunity for the company to improve margins and drive better organic growth than peers.”
A technician inspecting a specialized industrial machinery in an engineering lab.
Regal Rexnord Corporation (NYSE:RRX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Regal Rexnord Corporation (NYSE:RRX) at the end of the second quarter which was 31 in the previous quarter. 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 cheapest AI stock.
In another article, we discussed Regal Rexnord Corporation (NYSE:RRX) and shared Leon Cooperman’s stock portfolio and look at his firm’s top 12 picks. Regal Rexnord Corporation (NYSE:RRX) detracted from the performance of Diamond Hill Select Strategy in the previous quarter due to macroeconomic concerns. In addition, please check out our hedge fund investor letters Q3 2024 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.