Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Despite Attractive Market Shares, Rexnord Doesn't Look Too Interesting

More often than you might think, you find situations where there's a meaningful gap between the merits of the company and the merits of that company's stock. Rexnord (NYSE:RXN) is a significant player in the process/motion control and water infrastructure spaces - two markets that not only have above-average long-term growth prospects, but where Rexnord holds the #1 or #2 market share position in the segments that produce about 85% of its revenue.

Put together market-leading positions, a credible management system/philosophy, and potential rebounds in key end-markets like construction, and I can see solid prospects for the business. The stock, though, doesn't make nearly so much sense to me. Even though the shares are down almost 10% over...

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