Your largest equity buy in the last three months is...(long term buys mostly)

[coc]

3 hours ago, dealraker said:

The two were not much alike.  Old Dominion and Progressive were by far the two largest in the IRA.

Oh, thanks - sorry did delete my post as I saw you answered above. Thanks!

[coffeecaninvestor]

Started buying JNJ this week up to a 4% position now, and will likely buy more. Figured a 3% dividend that is growing is better than holding cash in a sweep account with interest rates about to be cut. Wanted something with less downside risk than the S&P500. 

[SafetyinNumbers]

3 hours ago, coffeecaninvestor said:

Started buying JNJ this week up to a 4% position now, and will likely buy more. Figured a 3% dividend that is growing is better than holding cash in a sweep account with interest rates about to be cut. Wanted something with less downside risk than the S&P500. 

Fair to say you own FFH already? On a look through basis, it’s hard to beat its float to market cap ratio.

[coffeecaninvestor]

24 minutes ago, SafetyinNumbers said:

Fair to say you own FFH already? On a look through basis, it’s hard to beat its float to market cap ratio.

I don't currently. I haven't spent the time to really dig into the business other than reading the thread. It's on my to due list. FFH may be cheap, but it seems to be more volatile, and that is what I am aiming to avoid. I want some upside and limited downside until I can find a fat pitch. Sounds good in theory for now at least. 

[SafetyinNumbers]

11 minutes ago, coffeecaninvestor said:

I don't currently. I haven't spent the time to really dig into the business other than reading the thread. It's on my to due list. FFH may be cheap, but it seems to be more volatile, and that is what I am aiming to avoid. I want some upside and limited downside until I can find a fat pitch. Sounds good in theory for now at least. 

FFH has a volatile ROE but I think the risk is now more to the upside than the downside given the solid investment income. Run rate for investment income is >$100/sh on a pre-tax basis. As a result, it’s hard for ROE to fall below 10% on a FTM period. It’s a 40% position for me so I obviously think it’s a fat pitch. The surprising part is how few people can see it.

[cubsfan]

On 9/2/2024 at 8:14 PM, Gregmal said:

Couple things. It’s not expensive, at all, and it’s basically a duopoly. I also have a friend who was basically as high up on the food chain of the other pest control company as you can get who has hammered into my head that “pest control is a hell of a business”. Third, merger integration is always a timing gamble, but eventually someone fixes it in instances like this. 
 

So it was a number of things, coming together, at a time when everyone tried convincing themselves 5% CDs were better alternatives than equities at 20-25x, and I just couldn’t see how ROL could be such a great biz at 40x but RTO wasn’t worth 15x, and that’s kinda the gist. If it lingers at the current valuation long enough it will be taken out; almost with certainty. 

 

This really is a great business with high returns. Need to have the stomach for roll ups, as much of the growth is acquisitions. Reminds me of Waste Management in the 80's & 90's. RTO is a scale business, so if they can integrate these acquisitions, it works well. Terminix was big and once digested, we likely get back to historic returns. After all this is the largest pest control business in the world - with demand growing steadily. Because of scale/route density/advertising/technology, etc - it's very difficult for small players to compete.

 

The real gem is in the institutional business, where the service is much less price sensitive and much more quality is demanded, as public health is involved with associated liability and business reputation risk at stake.

 

Like the garbage business - kind of a nasty boring business that is vitally important and very profitable.

[Gregmal]

51 minutes ago, cubsfan said:

 

This really is a great business with high returns. Need to have the stomach for roll ups, as much of the growth is acquisitions. Reminds me of Waste Management in the 80's & 90's. RTO is a scale business, so if they can integrate these acquisitions, it works well. Terminix was big and once digested, we likely get back to historic returns. After all this is the largest pest control business in the world - with demand growing steadily. Because of scale/route density/advertising/technology, etc - it's very difficult for small players to compete.

 

The real gem is in the institutional business, where the service is much less price sensitive and much more quality is demanded, as public health is involved with associated liability and business reputation risk at stake.

 

Like the garbage business - kind of a nasty boring business that is vitally important and very profitable.

Yea the valuation is rather stupid to me. The balance sheet is great. Profitability is unquestionable. Just really a matter of when with the Terminex integration. No shortage of acquirers for it as well. Just seems like a case where people are short term and impatient. 

[Cod Liver Oil]

Yes!!!!! RTO is a classic Peter Lynch dirty business involving rodents, insects, poison and waste tied together with a subscription bow.  I enjoy owning RTO and Dior together: beauty and the beast. I think the beast will best the beauty over the next year or two because pestilence never goes out of style.

 

Edited 16 hours ago by Cod Liver Oil

[73 Reds]

22 minutes ago, Gregmal said:

Yea the valuation is rather stupid to me. The balance sheet is great. Profitability is unquestionable. Just really a matter of when with the Terminex integration. No shortage of acquirers for it as well. Just seems like a case where people are short term and impatient. 

Is debt the issue or is it something else?  I haven't been following this; why would activist investors want to push out American management of an American subsidiary?

[Gregmal]

27 minutes ago, 73 Reds said:

Is debt the issue or is it something else?  I haven't been following this; why would activist investors want to push out American management of an American subsidiary?

No idea. Net debt to EV is of zero concern to me here.