Hedge Funds Brace for Impact: Top 5 Stocks to Dump Now

3. Rollins, Inc. (NYSE:ROL)

Number of Hedge Fund Holders in Q1 2022: 20

Number of Hedge Fund Holders in Q4 2021: 36

Rollins, Inc. (NYSE:ROL) is based in Atlanta, Georgia, offering consumer and commercial services. The company operates in the pest control and extermination industries via multiple wholly owned subsidiaries.

RBC Capital analyst Ashish Sabadra on April 11 raised the price target on Rollins, Inc. (NYSE:ROL) to $40 from $33 but reiterated a Sector Perform rating on the shares. The analyst stated that his Q1 forecasts were ahead of consensus given the solid momentum in Commercial Pest control, however, he also thinks that Rollins, Inc. (NYSE:ROL)’s organic growth will potentially moderate in Q1 and weaken more in Q2 as comparisons get more difficult. He also pointed out that technology adoption should enhance efficiency and partially offset the fuel costs.

According to Insider Monkey’s Q1 database, 20 hedge funds were bullish on Rollins, Inc. (NYSE:ROL), down from 36 funds in the last quarter. Select Equity Group is the leading stakeholder of the company, with 10.4 million shares worth $367.5 million. 

Here is what Baron Asset Fund has to say about Rollins, Inc. (NYSE:ROL) in its Q1 2022 investor letter:

“Rollins, Inc. (NYSE:ROL) is a leading provider of pest and termite control services. Shares contributed to performance as the company reported solid fourth quarter earnings and continued to grow its market share and modestly increase its pricing. We believe Rollins has a strong brand operating in an attractive and defensive end market (cockroaches will outlive us all) that should enable the company to compound its profitability for many years.”