Regal Rexnord Corporation (NYSE:RRX) Sees Large Growth in Short Interest

Key Points

• Short interest jumped 40.4% to 2,501,117 shares as of March 31 (about 3.8% of shares outstanding) with a days-to-cover of 2.3, signaling increased bearish bets on RRX.
• Regal slightly beat quarterly EPS ($2.51 vs. $2.47) and reported 4.3% year-over-year revenue growth, while Wall Street is generally bullish—consensus rating “Moderate Buy” with an average price target of $229.75.
• Insiders sold 53,451 shares worth roughly $11.39 million over the last three months (including CEO and a director), and insiders now own only 0.63% of the company, suggesting notable management share reductions.

Regal Rexnord Corporation (NYSE:RRX - Get Free Report) was the target of a large growth in short interest during the month of March. As of March 31st, there was short interest totaling 2,501,117 shares, a growth of 40.4% from the March 15th total of 1,781,433 shares. Based on an average daily volume of 1,074,457 shares, the days-to-cover ratio is currently 2.3 days. Approximately 3.8% of the shares of the company are sold short.

Regal Rexnord Price Performance

Shares of NYSE RRX opened at $201.13 on Wednesday. Regal Rexnord has a fifty-two week low of $94.42 and a fifty-two week high of $229.30. The stock has a fifty day moving average of $201.67 and a 200-day moving average of $165.60. The company has a debt-to-equity ratio of 0.70, a quick ratio of 1.10 and a current ratio of 2.15. The stock has a market cap of $13.39 billion, a PE ratio of 49.14, a price-to-earnings-growth ratio of 1.95 and a beta of 1.11.

Regal Rexnord (NYSE:RRX - Get Free Report) last issued its quarterly earnings results on Thursday, February 5th. The company reported $2.51 EPS for the quarter, topping analysts' consensus estimates of $2.47 by $0.04. Regal Rexnord had a net margin of 4.71% and a return on equity of 9.60%. The firm had revenue of $1.52 billion for the quarter, compared to analyst estimates of $1.54 billion. During the same quarter in the prior year, the firm earned $2.34 EPS. The business's revenue for the quarter was up 4.3% compared to the same quarter last year. Equities research analysts anticipate that Regal Rexnord will post 9.95 earnings per share for the current year.

Regal Rexnord Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Tuesday, April 14th. Stockholders of record on Tuesday, March 31st were paid a $0.35 dividend. The ex-dividend date was Tuesday, March 31st. This represents a $1.40 dividend on an annualized basis and a dividend yield of 0.7%. Regal Rexnord's payout ratio is currently 33.33%.

Insider Activity at Regal Rexnord

In other Regal Rexnord news, Director Curtis W. Stoelting sold 4,500 shares of the firm's stock in a transaction on Wednesday, February 4th. The stock was sold at an average price of $180.00, for a total transaction of $810,000.00. Following the transaction, the director owned 15,617 shares in the company, valued at $2,811,060. This trade represents a 22.37% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Louis V. Pinkham sold 36,728 shares of the firm's stock in a transaction on Monday, February 9th. The stock was sold at an average price of $215.52, for a total value of $7,915,618.56. Following the completion of the transaction, the chief executive officer owned 83,337 shares in the company, valued at $17,960,790.24. The trade was a 30.59% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 53,451 shares of company stock valued at $11,386,689 over the last three months. Company insiders own 0.63% of the company's stock.

Institutional Trading of Regal Rexnord

A number of hedge funds have recently bought and sold shares of the company. Oppenheimer Asset Management Inc. grew its position in Regal Rexnord by 475.2% during the third quarter. Oppenheimer Asset Management Inc. now owns 21,991 shares of the company's stock valued at $3,154,000 after buying an additional 18,168 shares during the period. AIA Group Ltd purchased a new stake in Regal Rexnord in the third quarter worth about $1,477,000. American Century Companies Inc. purchased a new position in shares of Regal Rexnord during the 3rd quarter valued at about $47,778,000. Nordea Investment Management AB lifted its holdings in Regal Rexnord by 30.7% during the third quarter. Nordea Investment Management AB now owns 2,028,936 shares of the company's stock valued at $289,083,000 after purchasing an additional 476,802 shares in the last quarter. Finally, JPMorgan Chase & Co. boosted its position in shares of Regal Rexnord by 97.0% in the third quarter. JPMorgan Chase & Co. now owns 260,853 shares of the company's stock worth $37,419,000 after purchasing an additional 128,468 shares during the period. Hedge funds and other institutional investors own 99.72% of the company's stock.

Wall Street Analysts Forecast Growth

A number of brokerages have recently commented on RRX. KeyCorp lifted their price target on shares of Regal Rexnord from $200.00 to $255.00 and gave the stock an "overweight" rating in a report on Tuesday, February 10th. Robert W. Baird set a $253.00 price target on shares of Regal Rexnord in a research report on Friday, February 6th. The Goldman Sachs Group raised their target price on Regal Rexnord from $170.00 to $230.00 and gave the stock a "buy" rating in a research note on Monday, February 9th. JPMorgan Chase & Co. lifted their price target on shares of Regal Rexnord from $190.00 to $230.00 and gave the company an "overweight" rating in a research note on Friday, February 6th. Finally, Zacks Research upgraded Regal Rexnord from a "strong sell" rating to a "hold" rating in a report on Tuesday, December 30th. Seven analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to MarketBeat.com, Regal Rexnord has an average rating of "Moderate Buy" and a consensus target price of $229.75.

About Regal Rexnord

Regal Rexnord Corporation NYSE: RRX is a global industrial manufacturer specializing in electric motors, power generation equipment and automated motion control systems. The company designs, engineers and produces a broad portfolio of products that includes energy-efficient electric motors, variable frequency drives, gearboxes, couplings, bearings and power transmission components. These offerings support critical applications in industries such as heating, ventilation and air conditioning (HVAC), refrigeration, data centers, water treatment, food and beverage processing, mining, oil and gas, and material handling.

The company's operations are organized into multiple business segments that address distinct customer needs.

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