Between the rally in industrial stocks from December and what appears to
be rising headwinds in many end-markets, I don’t think investors are
exactly spoiled for choice for great ideas in the industrial sector, but
Rexnord’s (RXN)
case stands out a bit for me. I wasn’t crazy about the shares back in
May of 2018, and the stock has lagged the sector by about 10% since
then, but the shares seem oddly valued relative to a decent motion
control business and growing water business. I am worried about a
slowdown in factory capex spending as well as shrinking growth in U.S.
commercial construction, but those concerns seem magnified in Rexnord’s
valuation.
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As Cyclical Headwinds Rise, Rexnord Not Getting Much Love
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