The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Rollins, Inc. (NYSE:ROL).
Rollins, Inc. (NYSE:ROL) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. Rollins, Inc. (NYSE:ROL) was in 30 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 34. Our calculations also showed that ROL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the recent hedge fund action encompassing Rollins, Inc. (NYSE:ROL).
Do Hedge Funds Think ROL Is A Good Stock To Buy Now?
At the end of March, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. On the other hand, there were a total of 25 hedge funds with a bullish position in ROL a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Select Equity Group was the largest shareholder of Rollins, Inc. (NYSE:ROL), with a stake worth $207.3 million reported as of the end of March. Trailing Select Equity Group was GAMCO Investors, which amassed a stake valued at $99.5 million. AQR Capital Management, Fundsmith LLP, and Markel Gayner Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Value Holdings LP allocated the biggest weight to Rollins, Inc. (NYSE:ROL), around 7.56% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, designating 1.17 percent of its 13F equity portfolio to ROL.
As one would reasonably expect, key hedge funds have been driving this bullishness. Fundsmith LLP, managed by Terry Smith, assembled the most outsized position in Rollins, Inc. (NYSE:ROL). Fundsmith LLP had $63.4 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $4.5 million position during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Donald Sussman’s Paloma Partners, and Joel Greenblatt’s Gotham Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Rollins, Inc. (NYSE:ROL). We will take a look at Raymond James Financial, Inc. (NYSE:RJF), Ally Financial Inc (NYSE:ALLY), Viatris Inc. (NASDAQ:VTRS), Tradeweb Markets Inc. (NASDAQ:TW), Qualtrics International Inc. (NASDAQ:XM), Jacobs Engineering Group Inc. (NYSE:J), and Avantor, Inc. (NYSE:AVTR). All of these stocks’ market caps match ROL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RJF | 33 | 749300 | -1 |
| ALLY | 51 | 2804131 | -6 |
| VTRS | 58 | 1825444 | -9 |
| TW | 26 | 311809 | -5 |
| XM | 37 | 1247053 | 37 |
| J | 24 | 995619 | -6 |
| AVTR | 48 | 2064929 | -8 |
| Average | 39.6 | 1428326 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.6 hedge funds with bullish positions and the average amount invested in these stocks was $1428 million. That figure was $643 million in ROL’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Jacobs Engineering Group Inc. (NYSE:J) is the least popular one with only 24 bullish hedge fund positions. Rollins, Inc. (NYSE:ROL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ROL is 42.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and surpassed the market again by 6 percentage points. Unfortunately ROL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ROL investors were disappointed as the stock returned 0.9% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
