I'm an insurance Case Manager with a deep interest in investing. My investment philosophy is all about buying high quality stocks and great businesses. My favorite businesses are those led by disciplined capital allocators, earn exceptional returns on capital, and can compound their invested capital over long periods of time.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. ...

Rollins Inc. (NYSE:ROL) is one of the 14 Best Consumer Discretionary Stocks to Buy Right Now. Morgan Stanley, on February 14, trimmed its target price on Rollins by 2.9% to $70 (from $72), but kept its Overweight call. This change in target comes a couple of days after Rollins released its Q4 2025 earnings, on February 11, which showed organic revenue growth of 5.7%, missing expectations, due to poor weather in the quarter. In the same report, Rollins’s management provided both its short-term and medium ...

Group 1: Company Performance - Conestoga Capital Advisors reported that Rollins, Inc. (NYSE:ROL) stock closed at $60.92 per share on February 19, 2026, with a one-month return of -3.16% and a 52-week gain of 18.78% [2] - Rollins, Inc. achieved record revenue of $3.8 billion in 2025, reflecting an 11% year-over-year increase [4] - The company demonstrated organic growth of 7.2%, driven by commercial organic growth of 8.4%, and reported strong incremental margins of 35% [3] Group 2: Investment Insights - Rollins, Inc. is characterized as a premier global consumer and commercial services company, providing essential pest control services through brands like Orkin, and remains a core holding due to its defensive characteristics and ability to compound earnings through various economic cycles [3] - Despite the potential of Rollins, Inc. as an investment, the company is not among the 30 most popular stocks among hedge funds, with 48 hedge fund portfolios holding its shares at the end of Q3 2025, up from 42 in the previous quarter [4] - Conestoga Capital Advisors noted that certain AI stocks may offer greater upside potential and carry less downside risk compared to Rollins, Inc. [4]

Core Insights - The company reported strong financial performance, achieving double-digit growth in revenue, earnings, and cash flow for three consecutive years [1] - It marked the 24th consecutive year of annual revenue growth and the 97th consecutive quarter of revenue growth, indicating consistent operational success [2] Financial Performance - The company continues to demonstrate exceptional performance in the pest control industry, with a portfolio of brands contributing to its growth [1] - The recent results were influenced by weather-related factors, which the company is actively monitoring and quantifying [1]

Rollins (NYSE: ROL) FY Conference Summary Company Overview - Rollins is a portfolio of pest control brands, demonstrating strong performance with a focus on recurring revenue streams. [5][9] Key Financial Performance - Achieved double-digit revenue and earnings growth for three consecutive years, marking the 24th consecutive year of annual revenue growth and the 97th consecutive quarter of revenue growth. [5][6] - 75% of the business is under contract, indicating a strong recurring revenue model. [5] - The ancillary business grew at 15-16% year-over-year, while the one-time business faced challenges due to adverse weather conditions. [6][9] Weather Impact - Weather conditions negatively impacted the one-time business, particularly in the Midwest and Northeast, leading to a decline in growth during Q4. [6][7] - The company anticipates a recovery in Q1, with expectations of making up for lost revenue as the peak season approaches. [12][13] Growth Opportunities - Rollins is focusing on cross-brand collaboration to enhance growth, particularly in the ancillary services segment. [20][21] - There is significant potential to reduce customer churn by redirecting customers from one brand to another within the portfolio. [22] Operational Improvements - The company is investing in modernization initiatives, including process improvements and technology upgrades, to enhance operational efficiency. [24][42] - A new EPM system is being implemented to improve data synthesis and decision-making capabilities. [43][50] Margin Profile - The one-time business has a gross margin of over 70%, indicating strong profitability potential. [16] - The company is addressing high turnover rates among field staff, which has significant cost implications. [27][31] Capital Allocation and M&A Strategy - Rollins aims for 2-3% growth through M&A, with a pipeline of potential deals. [56][62] - The company has successfully completed over 100 acquisitions in the past few years, with a focus on maintaining a long-term approach to business integration. [61][63] Shareholder Engagement - The Rollins family remains supportive of modernization efforts and is aligned with the interests of other shareholders. [77][79] - The company has increased its dividend by 85% over the past few years, reflecting strong financial performance. [73] Conclusion - Rollins is positioned for continued growth through its strong recurring revenue model, operational improvements, and strategic M&A initiatives. The company remains optimistic about its future performance despite recent weather-related challenges. [9][63]

Core Insights - The article discusses the author's extensive experience in researching various companies across different sectors, including commodities and technology, highlighting a focus on value investing through a YouTube channel [1]. Group 1: Company Research - The author has researched companies in-depth for over a decade, covering sectors such as oil, natural gas, gold, copper, and technology [1]. - The author has transitioned from writing a blog to creating a value investing-focused YouTube channel, where hundreds of companies have been analyzed [1]. - The preferred focus is on metals and mining stocks, but the author is also knowledgeable in consumer discretionary/staples, REITs, and utilities [1].

Core Insights - Miami has been ranked as the most termite-infested city in the U.S. for the fourth consecutive year, followed by Los Angeles and Tampa, Florida [1] - The list highlights the ongoing termite pressure in warm-weather cities, with Florida cities occupying six spots in the top 20 [1] - New York made a significant jump, reentering the top 10 at No. 9, climbing seven spots from the previous year [1] Rankings and Data - The ranking is based on data from residential termite treatments performed by Orkin from January 15, 2025, to January 16, 2026 [1] - The top 10 cities for termite infestations are: 1. Miami 2. Los Angeles 3. Tampa, Fla. 4. Washington, D.C. 5. Orlando, Fla. 6. Houston 7. West Palm Beach, Fla. 8. Dallas 9. New York 10. Atlanta [1] Termite Damage and Prevention - Termites cause an estimated billions of dollars in damage to U.S. homes annually, often going unnoticed until significant damage occurs [1] - A mature termite colony can contain between 60,000 to 1 million termites, with some Formosan colonies exceeding 2 million [1] - Common signs of termite activity include bubbling or cracked paint, hollow-sounding wood, and mud tubes along walls [1] Prevention Strategies - Homeowners are encouraged to take preventive measures such as installing baiting systems, regular inspections, and sealing cracks near foundations [1] - Orkin offers free termite inspections to help identify risks early and recommend tailored solutions [1]

Financial Performance - Rollins reported revenues of $3.76 billion for 2025, an increase of 11.0% compared to $3.39 billion in 2024[177]. - Organic revenue growth was 6.9% in 2025, driven by effective sales and service staffing levels[169]. - The company completed 26 transactions in 2025, including 22 acquisitions and 4 franchise buybacks, contributing to 4.1% of revenue growth[170]. - Gross profit margin improved to 52.8% in 2025, up from 52.7% in 2024, while operating margin decreased slightly to 19.3%[172]. - Adjusted operating income for 2025 was $752.2 million, reflecting an 11.4% increase from $675.1 million in 2024[177]. - Net income increased by 12.9% to $526.7 million in 2025, compared to $466.4 million in 2024[177]. - Revenue for the year ended December 31, 2025, was $3.76 billion, an increase of $372.3 million, or 11.0%, from 2024 revenues of $3.39 billion[182]. - Organic revenue growth was 6.9%, with acquisitions contributing an additional 4.1% during the year[182]. - Gross profit for 2025 was $2.0 billion, an increase of $198.5 million, or 11.1%, compared to $1.8 billion in 2024[184]. - Operating income increased by $68.8 million, or 10.5%, for the year, with an operating margin of 19.3%[188]. - The company reported a net income of $526.7 million, or 14.0% of revenue, compared to $466.4 million, or 13.8% in 2024[182]. - Adjusted EPS for 2025 was $1.12, representing a 13.1% increase from $0.99 in 2024[211]. - Free cash flow for 2025 was $650.02 million, up 12.1% from $580.08 million in 2024[211]. - Adjusted free cash flow for 2025 reached $671.73 million, a significant increase of 20.3% from $558.37 million in 2024[211]. Future Outlook - The company expects to achieve 7% to 8% organic revenue growth in 2026, despite a potentially slower start in Q1[162]. - Rollins anticipates an effective tax rate of 24.5% to 25% in 2026 and interest expense of approximately $30 million related to borrowings[162]. - The effective tax rate decreased to 24.9% in 2025 from 26.0% in 2024, with an expected rate of 24.5% to 25% in 2026[191]. - The company expects interest expense to be approximately $30 million in 2026, influenced by borrowings under its 2035 Senior Notes and commercial paper program[189]. Cash Flow and Capital Management - Net cash provided by operating activities increased by $70.5 million, or 11.6%, to $678.1 million for the year ended December 31, 2025, driven by strong operating results[226]. - Cash used in investing activities rose to $326.7 million in 2025 from $176.2 million in 2024, primarily due to the acquisition of Saela Pest Control for $309.5 million[228]. - Cash used in financing activities decreased to $343.6 million in 2025 from $440.7 million in 2024, with cash dividends paid increasing to $327.9 million ($0.68 per share) from $298.0 million ($0.62 per share)[229]. - The Company completed the repurchase of 3,478,260 shares of common stock for approximately $200 million during the year ended December 31, 2025[231]. - The Company maintained $82.4 million in letters of credit as of December 31, 2025, up from $72.0 million as of December 31, 2024, to secure various insurance contracts[224]. - The Company has a remaining authorization of 11.4 million shares under its share repurchase program as of December 31, 2025[234]. - The Company registered $1.5 billion of securities for future issuance under its Form S-3 shelf registration statement, which will expire in June 2026[235]. - The Company had $114.4 million of outstanding commercial paper borrowings as of December 31, 2025, with no material impact expected from a one percent increase in interest rates[243]. - The Company invested $28.1 million in capital expenditures during 2025, compared to $27.6 million in 2024[228]. Debt and Borrowings - The company issued $500 million in 2035 Senior Notes at an interest rate of 5.25%, with proceeds primarily used to repay borrowings[218]. - As of December 31, 2025, the company had $114.4 million in outstanding borrowings under its commercial paper program[220]. - The Company had no outstanding borrowings under the $1.0 billion Revolving Credit Facility as of December 31, 2025, compared to $397.0 million in borrowings as of December 31, 2024[223]. - The leverage ratio improved to 0.9x in 2025 from 0.8x in 2024[214].

Core Viewpoint - The article discusses the stock movements of several companies including Cisco, AppLovin, Micron, Fastly, Equinix, Rollins, and Novocure, highlighting the impact of recent economic data on investor sentiment [1]. Group 1: Stock Movements - Cisco's stock performance is noted among the movers, indicating potential investor interest or market reaction [1]. - AppLovin's stock is also mentioned, suggesting fluctuations that may be tied to broader market trends or company-specific news [1]. - Micron's stock movement is highlighted, reflecting changes in the semiconductor industry and investor confidence [1]. Group 2: Economic Context - The article references a recent batch of economic data, including a delayed U.S. monthly jobs report, which is influencing stock futures and overall market sentiment [1]. - The rising stock futures on Thursday indicate a positive outlook among investors as they digest the latest economic indicators [1].

Company Performance - Cisco (CSCO) reported solid earnings and guidance but saw its stock decline due to concerns over rising memory costs, which analysts believe are manageable given Cisco's strength in AI-related areas [5] - AppLovin (APP) also experienced a stock drop despite beating revenue and earnings estimates, guiding for Q1 revenue between $1.745 billion and $1.775 billion, exceeding the $1.7 billion estimate [5] - Rollins (ROL) was the largest decliner in the S&P 500 after missing both revenue and adjusted earnings estimates, attributing the shortfall to erratic weather patterns affecting seasonal work [6] Economic Indicators - Existing home sales fell by 8.4% in January to a seasonally adjusted annual rate of 3.91 million, below the consensus estimate of 4.2 million and down from 4.27 million in December [7] - The decline in home sales is being compared to lows seen during the Great Recession, with some analysts suggesting that the drop may be temporary and could reverse if mortgage rates decrease in the coming quarters [8] Market Trends - The S&P 500 has not shown significant gains this year, but there is a rotation away from last year's leading sectors, benefiting less trendy areas of the market [9] - The S&P 500 Machinery Index has increased by over 20% year to date, with companies like Cummins (CMI), Nordson (NDSN), PACCAR (PCAR), Caterpillar (CAT), and Parker-Hannifin (PH) receiving strong ratings [10]