Diamond Hill Capital Management, LLC / Mid Cap Strategy on Regal Rexnord Corporation
Thesis
Diamond Hill believes Regal Rexnord is benefiting from strong demand tied to data-center buildouts. The company also delivered better-than-expected organic growth and margin expansion as merger synergies and operational improvement initiatives took hold. The fund believes the market has not yet fully reflected the benefits of those execution gains. That creates an opportunity for continued fundamental improvement to translate into a higher valuation.
“we believe the market has yet to fully reflect the benefits of these efforts.”