Regal Beloit Still Underappreciated On Its Recovery, Expansion, And M&A Leverage

 

Shorter-cycle industrial stocks haven’t been doing as well lately, with the market worried that growth is already peaking and preferring instead to move on to longer-cycle ideas or theme stocks (automation, electrification, HVAC, et al). That hasn’t helped Regal Beloit (RBC), as the shares had been lagging the broader industrial space since my last update until a recent post-earnings run.

I continue to believe that Regal Beloit is underappreciated for its leverage to automation and HVAC, as well as a longer recovery/expansion cycle across the industrial markets it serves. Add in synergy benefits from the coming acquisition of Rexnord’s (RXN) Process & Motional Control (or PMC) business, and I think there’s more to this story than is being reflected in the share price.

 

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Regal Beloit Still Underappreciated On Its Recovery, Expansion, And M&A Leverage