Below is a note written by CEO Keith McCullough on why we're adding Rollins (ROL) to the short side of Investing Ideas today:
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With Industrials (XLI) up this morning, I'm still hunting for shorts into the Q1-Q3 of 2019 #EarningsSlowing period. One of our Industrials analyst Jay Van Sciver's Best Ideas (Institutional Research product) remains Rollins (ROL). He thinks it is grossly overvalued. It has recently bounced to lower-highs on #decelerating volume. Here's an excerpt from Jay's summary SELL note: "The current share price of Rollins makes little sense to us, and we expect a significant downward revaluation by the market. Margin gains have stalled amid increasing competitive intensity in a mature, slow growing market. Attractive markets for growth and acquisitions – those where route density offers cost advantages – present less runway and higher transaction prices." Sell on green, KM |
