Brown Advisors, an investment management company, released its “Brown Advisors Global Leaders Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the letter the firm discusses its performance, four new investments made in 2024, lessons from one exit, and insights from its annual offsite. The strategy targets double-digit annualized returns over five years, aiming for 10%+ to double investors’ money every seven years. In 2024, the UCITS C-share USD returned 14.7% net of fees, while the MSCI ACWI benchmark returned 17.5%. Since inception, the Global Leaders UCITS C-share USD has delivered an annualized 11.4% net after fees, surpassing firm’s target, compared to the MSCI ACWI’s 8.9%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Brown Advisors Global Leaders Strategy emphasized 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 2.90%, and its shares lost 7.82% of their value over the last 52 weeks. On February 28, 2025, Rentokil Initial plc (NYSE:RTO) stock closed at $25.21 per share with a market capitalization of $12.684 billion.
Brown Advisors Global Leaders Strategy stated the following regarding Rentokil Initial plc (NYSE:RTO) in its Q4 2024 investor letter:
“Rentokil Initial plc (NYSE:RTO) is the global leader in pest control and became the largest North American pest control company in both the commercial and residential settings after its acquisition of Terminix in 2022. Pest control is highly non-deferrable in commercial markets with multi-year contracts and underpinned by mid-single digit structural growth. It is much more transactional in residential settings (“get that rat out of here”) with annual contracts at best. It is the industry’s barriers to scale that allow Rentokil, and close rival Rollins, to grow and consolidate the market. Bolt-on acquisitions improve technicians’ route density which reinforce scale economies. In US commercial markets the top three players account for over 80% of revenues, within US residential pest control the top four players are over 70% of industry sales. Terminix merger integration has not gone smoothly so far, which translated into a profit warning during Q3 2024, allowing us to significantly build out our initial position during 4Q24. The integration will likely take time as management combines branches to optimize their network, whilst investing in much-needed back-end technology. On a 5-year view, we expect the merger to strengthen Rentokil’s route density and scale, to deliver margin and Return on Invested Capital (RoIC) improvement with a mid-teens base case IRR.”
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.
In another article, we discussed Rentokil Initial plc (NYSE:RTO) and shared Vulcan Value Partners’ views on the company. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.