ROP: Adding Roper Technologies to Investing Ideas (Short Side)

02/09/21 11:00AM EST

Hedgeye CEO Keith McCullough is adding Roper Technologies (ROP) to the short side of Investing Ideas. Below is a brief note.

Looking for shorts that worked on fundamental reality (i.e. down hard on #accelerating volume on EPS news day) that have since bounced to lower-highs on #decelerating volume?

Roper (ROP) fits that bill.

Here's a good summary excerpt from Industrials analyst Jay Van Sciver's Industrials Pro product on the name:

ROP | That’s Not Much Compounding On $6 Billion

We think ROP is an obviously overvalued acquisitive conglomerate with a collection of largely unrelated businesses for which it often overpaid.  A business isn’t capital light just because the ‘capital’ is in non-amortizing intangibles.  Despite investing about $6 billion in 2020, Roper’s Income from operations declined from $398.4 mil to $380.7. Compounding didn’t.

Sell the bounce,

KM

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.