In this article we will analyze whether Rollins, Inc. (NYSE:ROL) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Rollins, Inc. (NYSE:ROL) was in 23 hedge funds’ portfolios at the end of September. The all time high for this statistic is 34. ROL has experienced a decrease in enthusiasm from smart money recently. There were 30 hedge funds in our database with ROL holdings at the end of June. Our calculations also showed that ROL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now we’re going to view the recent hedge fund action encompassing Rollins, Inc. (NYSE:ROL).
Do Hedge Funds Think ROL Is A Good Stock To Buy Now?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ROL over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GAMCO Investors was the largest shareholder of Rollins, Inc. (NYSE:ROL), with a stake worth $95.5 million reported as of the end of September. Trailing GAMCO Investors was Fundsmith LLP, which amassed a stake valued at $79.4 million. AQR Capital Management, Select Equity Group, and Arrowstreet Capital 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 7.68% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, dishing out 0.84 percent of its 13F equity portfolio to ROL.
Judging by the fact that Rollins, Inc. (NYSE:ROL) has experienced falling interest from the smart money, logic holds that there lies a certain “tier” of hedge funds who sold off their full holdings last quarter. Intriguingly, Louis Navellier’s Navellier & Associates dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $6.5 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also cut its stock, about $1.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 7 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Rollins, Inc. (NYSE:ROL) but similarly valued. We will take a look at Genuine Parts Company (NYSE:GPC), Nuance Communications Inc. (NASDAQ:NUAN), CMS Energy Corporation (NYSE:CMS), Principal Financial Group Inc (NYSE:PFG), Jacobs Engineering Group Inc. (NYSE:J), Lufax Holding Ltd (NYSE:LU), and Avery Dennison Corporation (NYSE:AVY). This group of stocks’ market caps resemble ROL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GPC | 28 | 469773 | -1 |
| NUAN | 61 | 4867945 | -11 |
| CMS | 25 | 415325 | -6 |
| PFG | 18 | 146441 | 0 |
| J | 20 | 955724 | -9 |
| LU | 14 | 225041 | -5 |
| AVY | 29 | 931551 | -5 |
| Average | 27.9 | 1144543 | -5.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.9 hedge funds with bullish positions and the average amount invested in these stocks was $1145 million. That figure was $539 million in ROL’s case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand Lufax Holding Ltd (NYSE:LU) is the least popular one with only 14 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 27.9. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 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 -8.5% since the end of September (through 12/9) 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.
Follow Rollins Inc (NYSE:ROL)
Follow Rollins Inc (NYSE:ROL)
Suggested Articles:
- Top 10 Electric Utility Dividend Stocks to Buy
- 15 Largest Coal Companies
- 25 Best Things To Buy On Amazon Under 20 Dollars
Disclosure: None. This article was originally published at Insider Monkey.
