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:
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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
