Is Allegion Public Limited Co. (ALLE) an Undervalued Stock?

Soumya Eswaran

Thu, Apr 17, 2025, 5:00 AM 3 min read

Fiduciary Management Inc. (FMI), an independent money management firm, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. US stock markets experienced a decline in Q1 due to changing trade policies and skepticism about AI, with the S&P 500 Index and Russell 2000 Index falling 4.27% and 9.48%, respectively. Consumer confidence fell to a 12-year low amid uncertainty. International stock markets performed better. Value equities are outperforming the growth stock so far in 2025, which is encouraging. All the FMI portfolios have an active share above 90%. The firm’s focus is to find the best opportunities, and it has successfully executed a disciplined, value-oriented process for over 45 years. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Fiduciary Management Inc. highlighted stocks such as Allegion plc (NYSE:ALLE). Allegion plc (NYSE:ALLE) offers security products and solutions. The one-month return of Allegion plc (NYSE:ALLE) was -2.74%, and its shares lost 0.52% of their value over the last 52 weeks. On April 16, 2025, Allegion plc (NYSE:ALLE) stock closed at $125.13 per share with a market capitalization of $10.798 billion.

Fiduciary Management Inc. stated the following regarding Allegion plc (NYSE:ALLE) in its Q1 2025 investor letter:

"Allegion plc (NYSE:ALLE) is a leading global provider of security products and solutions, with a particularly strong presence in the attractive U.S. non-residential markets. While these markets are economically sensitive (cyclical) and many are currently weakening, the industry has grown reliably over time with the installed base of buildings and homes (approximately half of sales driven by aftermarket), rising desire for safety, security, and privacy, and increasing adoption of electronic products which enable enhanced efficiency, safety, and control. The commercial electronic security hardware market is dominated by three players (ASSA ABLOY, Allegion, Dormakaba), who are estimated to control 70-80% of the global market share. Allegion’s trusted brands (Schlage, Kryptonite, Stanley Access Technologies, etc.), large installed base, efficient manufacturing/service levels, technical and specifications expertise, and channel relationships built over decades make the company’s position in these markets very difficult to replicate. The stock is trading well below the market, which we view as attractive given its above average business quality."