The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Rollins, Inc. (NYSE:ROL) and determine whether the smart money was really smart about this stock.
Rollins, Inc. (NYSE:ROL) was in 29 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 34. ROL shareholders have witnessed an increase in hedge fund interest recently. There were 25 hedge funds in our database with ROL positions at the end of the first quarter. Our calculations also showed that ROL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a glance at the fresh hedge fund action regarding Rollins, Inc. (NYSE:ROL).
What does smart money think about Rollins, Inc. (NYSE:ROL)?
At the end of June, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in ROL a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Select Equity Group held the most valuable stake in Rollins, Inc. (NYSE:ROL), which was worth $274.1 million at the end of the third quarter. On the second spot was GAMCO Investors which amassed $97.3 million worth of shares. Markel Gayner Asset Management, AQR Capital Management, and Value Holdings LP 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 10.02% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, setting aside 4.09 percent of its 13F equity portfolio to ROL.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Rollins, Inc. (NYSE:ROL) headfirst. GLG Partners, managed by Noam Gottesman, created the largest position in Rollins, Inc. (NYSE:ROL). GLG Partners had $6.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $4.2 million position during the quarter. The other funds with brand new ROL positions are Peter Muller’s PDT Partners, Qing Li’s Sciencast Management, and Parvinder Thiara’s Athanor Capital.
Let’s check out hedge fund activity in other stocks similar to Rollins, Inc. (NYSE:ROL). We will take a look at International Paper Company (NYSE:IP), The Hartford Financial Services Group Inc (NYSE:HIG), Tyler Technologies, Inc. (NYSE:TYL), ONEOK, Inc. (NYSE:OKE), Pembina Pipeline Corp (NYSE:PBA), Fifth Third Bancorp (NASDAQ:FITB), and Ventas, Inc. (NYSE:VTR). 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|
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.4 hedge funds with bullish positions and the average amount invested in these stocks was $345 million. That figure was $577 million in ROL’s case. The Hartford Financial Services Group Inc (NYSE:HIG) is the most popular stock in this table. On the other hand Pembina Pipeline Corp (NYSE:PBA) is the least popular one with only 10 bullish hedge fund positions. Rollins, Inc. (NYSE:ROL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ROL is 67.3. 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. Hedge funds were also right about betting on ROL as the stock returned 28.3% during Q3 (through September 14th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.