Rentokil (RTO) Slid Due to Challenges from Terminix Acquisition

Cooper Investors, an investment management firm, released its “Cooper Investors Global Equities Fund (Hedged)” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 6.41% in the third quarter, compared to a 4.67% return for the MSCI ACWI 100% Hedged to AUD net dividends benchmark. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Cooper Investors Global Equities Fund (Hedged) highlighted stocks like Rentokil Initial plc (NYSE:RTO) in the third 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 12.427%, and its shares lost 12.67% of their value over the last 52 weeks. On October 18, 2024, Rentokil Initial plc (NYSE:RTO) stock closed at $24.74 per share with a market capitalization of $12.427 billion.

Cooper Investors Global Equities Fund (Hedged) stated the following regarding Rentokil Initial plc (NYSE:RTO) in its Q3 2024 investor letter:

Pest control company Rentokil Initial plc (NYSE:RTO) continues to have difficulties with acquired US asset Terminix. The deal was closed in 2022 and nearly two years later management are still struggling with resourcing and branch integration. The result of which is a continued erosion in market share, in many ways undermining the rationale of the deal. Our investment approach is long-term, which means we assess risks and opportunities over a three to five year period. However, in order for companies to keep our capital, they must execute relentlessly in the interim. In the case of Rentokil, management have failed this test and we exited the position accordingly.

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Rentokil Initial plc (NYSE:RTO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Rentokil Initial plc (NYSE:RTO) at the end of the second quarter which was 20 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 Aristotle Capital International Equity Strategy’s views on the company. Cooper Investors Global Equities Fund (Hedged) highlighted Rentokil Initial plc’s (NYSE:RTO) integration challenges in its Q2 2024 investor letter. In addition, please check out our hedge fund investor letters Q3 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.