Louis V. Pinkham, the Chief Executive Officer of Regal Rexnord Corp (NYSE:ZWS) (NYSE:RRX), recently sold 8,774 shares of the company's common stock, according to a filing with the Securities and Exchange Commission. The shares were sold at an average price of $180.03, resulting in a total transaction value of approximately $1.58 million.
In addition to the sale, Pinkham exercised stock appreciation rights, acquiring 55,581 shares at $78.05 each. This transaction, valued at around $4.34 million, was part of a series of stock appreciation rights and common stock transactions reported in the filing. Following these transactions, Pinkham's direct ownership stands at 149,618.007 shares.
In other recent news, Regal Rexnord Corporation reported mixed third-quarter results, with record-high adjusted gross and EBITDA margins despite a slight decline in total sales. The company saw a 2.5% daily increase in orders, primarily driven by its Industrial Powertrain Solutions segment, yet faced challenges in the Power Efficiency Solutions and Applied Motion Control segments. Amid these developments, Loop Capital raised its price target for Regal Rexnord to $220, maintaining a Buy rating on the stock.
The company's earnings were supported by favorable tax positions and cost savings from synergies, which balanced out lower product volumes. Regal Rexnord revised its full-year 2024 sales outlook downwards and expects limited growth in 2025 due to ongoing market uncertainties. However, Loop Capital's analysis suggests that Regal Rexnord is in a solid position to achieve double-digit annual earnings per share growth over the next several years, driven by additional synergy savings, reduced interest expenses from debt repayment, and the potential for significant operating leverage as market conditions improve.
Regal Rexnord remains optimistic about improving performance in 2025, particularly in the Applied Motion Control segment, and anticipates ending 2025 with free cash flow around $1 billion. The company plans to provide more detailed guidance during the fourth quarter report and forecasts an EBITDA margin increase of 200 basis points for 2025. Despite some bearish signs, such as a decline in Power Efficiency Solutions net sales and total debt of approximately $5.7 billion, the company's bullish highlights include growth in machinery off-highway markets and a rise in Industrial Powertrain Solutions segment's orders.
InvestingPro Insights
While Louis V. Pinkham's recent stock transactions have caught investors' attention, it's crucial to consider Regal Rexnord Corp's broader financial picture. According to InvestingPro data, the company boasts a market capitalization of $11.27 billion, reflecting its substantial presence in the industrial sector.
Regal Rexnord's financial health appears robust, with an InvestingPro Tip highlighting that its liquid assets exceed short-term obligations. This strong liquidity position aligns well with the company's ability to maintain dividend payments for 52 consecutive years, as noted in another InvestingPro Tip. Such consistency in dividend payments may be particularly appealing to income-focused investors, especially given the current dividend yield of 0.82%.
The company's stock performance has been noteworthy, with a one-year price total return of 57.14%. This impressive return underscores an InvestingPro Tip indicating a high return over the last year, which may explain the CEO's decision to exercise stock appreciation rights and sell a portion of shares.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights with 7 more tips available for Regal Rexnord Corp. These tips could provide valuable context for understanding the company's valuation, growth prospects, and market position.
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