Investment management company Vulcan Value Partners recently released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, the US economy was stronger than expected; the large-cap stocks led the robust U.S. equities markets. Although it is still excessively high, inflation did decrease throughout the course of the year. The largest market cap U.S. Companies performed better than the whole market. Lastly, U.S. stocks outperformed the majority of equities in non-U.S. markets. During Q4 and 2024, Focus and Focus Plus were the best performing strategies while Small Cap was the worst performing. However, all strategies had positive returns for the year. In the quarter, the Large Cap Composite returned -0.1% net of fees and expenses, the Small Cap Composite returned -7.3% net, the Focus Composite returned 6.3% net, the Focus Plus composite returned 7.4% and the All-Cap Composite returned -2.5% net. For more information on the fund’s best picks in 2024, please check its top five holdings.
Vulcan Value Partners highlighted stocks like Rentokil Initial plc (NYSE:RTO) in the fourth quarter 2024 investor letter. Rentokil Initial plc (NYSE:RTO) is a route-based services provider. The one-month return of Rentokil Initial plc (NYSE:RTO) was -6.06%, and its shares lost 8.58% of their value over the last 52 weeks. On January 17, 2025, Rentokil Initial plc (NYSE:RTO) stock closed at $23.86 per share with a market capitalization of $11.985 billion.
Vulcan Value Partners stated the following regarding Rentokil Initial plc (NYSE:RTO) in its Q4 2024 investor letter:
“We purchased six new positions during the quarter: Sodexo SA, Crown Holdings Inc., Heineken NV, Rentokil Initial plc (NYSE:RTO), Pernod Ricard SA, and UnitedHealth Group Inc. Rentokil Initial is a global provider of route-based pest control and commercial hygiene services. The company’s contracted services generate high recurring revenue, strong margins, and robust free cash flow. Rentokil is the largest pest control operator in the U.S. and globally. Barriers to entry in the industry are quite low, but barriers to scale are significant. Rentokil benefits from a strong brand with local scale-based competitive advantages which drive powerful route density. Rentokil is in the midst of integrating the Terminix business which it acquired in October of 2022. There have been challenges along the way, but CEO Andy Ransom and the management team are taking a methodical approach and responding to feedback at the local level to chart the integration course. Over time, we believe that management will successfully integrate the Terminix business. This integration should improve customer retention and enable the North American pest control business to grow organically at market rates which should drive stronger route density and higher margins.”
A specialist cleaning service team in full protective equipment removing hazardous waste.
Rentokil Initial plc (NYSE:RTO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Rentokil Initial plc (NYSE:RTO) at the end of the third quarter which was 18 in the previous quarter. While we acknowledge the potential of Rentokil Initial plc (NYSE:RTO) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Rentokil Initial plc (NYSE:RTO) and shared the list of stocks billion Dollar hedge fund Voss Capital is crazy about. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.