Oakmark Funds, advised by Harris Associates, released its “Oakmark International Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. For the quarter ended March 31, 2025, the fund’s Investor Share Class returned 7.88% compared to the MSCI World ex USA Index’s 6.20% return. Since its inception, the fund returned 8.37% compared to a 6.07% return for the index. Financials and health care sector contributed to the fund’s performance in the quarter, while communication services and information technology detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Oakmark International Fund highlighted stocks such as Rentokil Initial plc (NYSE:RTO). Rentokil Initial plc (NYSE:RTO) is a route-based services provider. The one-month return of Rentokil Initial plc (NYSE:RTO) was -1.40%, and its shares lost 22.69% of their value over the last 52 weeks. On April 16, 2025, Rentokil Initial plc (NYSE:RTO) stock closed at $21.84 per share with a market capitalization of $11.064 billion.
Oakmark International Fund stated the following regarding Rentokil Initial plc (NYSE:RTO) in its Q1 2025 investor letter:
“Rentokil Initial plc (NYSE:RTO) is the largest pest control company globally. We think pest control is a good business that grows GDP plus with low volatility, earns at tractive margins, and has low capital intensity with strong cash flow generation. As a market leader, Rentokil additionally benefits from scale ad vantages that drive lower procurement and customer acquisition costs, and greater customer monetization, thanks to the breadth of products and ser vices the company can offer at a premium price. Due to industry fragmentation, Rentokil also has a strong pipeline of acquisitions with attractive eco nomics. While most of Rentokil’s mergers and acquisitions are bolt-ons, they have occasionally done large deals. Their most recent large deal, the acquisition of Terminix, has gone poorly to-date and resulted in a share price decline in excess of the deal value. While Terminix’s integration will take several quarters to complete, we believe they will ultimately succeed and that the resulting business will be a stronger and more profitable one that can deliver growth in line with the industry’s average. This should drive a re-rating in the shares towards peer and private market multiples. We believe the market has overly discounted the business’s future prospects.”
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, 24 hedge fund portfolios held Rentokil Initial plc (NYSE:RTO) at the end of the fourth quarter compared to 19 in the third 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.
We covered Rentokil Initial plc (NYSE:RTO) in another article, where we shared Silver Beech Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 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.