Why Rentokil Initial’s (RTO) Discount to Rollins Could Narrow

Why Rentokil Initial’s (RTO) Discount to Rollins Could Narrow

Tue, September 15, 2026 at 5:33 PM GMT+3 2 min read

• RTO -1.18%
• RTO -1.18%

Broyhill Asset Management, a Charlotte-based firm, issued its second-quarter 2026 investor letter, which is available for download here. The Broyhill Equity Composite gained 8.8% in Q2, trailing the MSCI All Country World Index's 15.1% and the MSCI ACWI Value Index's 10.8%. For the first half, the Composite returned 2.3%, versus 11.5% for the Index. The letter highlights that a significant portion of the shortfall occurred in April due to market dynamics and geopolitical events, with tech, particularly semiconductors, driving recent gains. Broyhill notes its lack of direct semiconductor exposure but acknowledges potential interest in the sector if opportunities arise, maintaining its investment philosophy focused on capital protection in fragile market conditions. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, Broyhill Asset Management highlighted Rentokil Initial plc (NYSE:RTO). Rentokil Initial plc (NYSE:RTO) is a route-based service provider that offers a range of pest control services. On September 14, 2026, Rentokil Initial plc (NYSE:RTO) closed at $22.55 per share. Over the past month, Rentokil Initial plc (NYSE:RTO) declined 5.34%, but its shares are down 10.61% over the past year. Rentokil Initial plc (NYSE:RTO) has a market capitalization of $11.2 billion, and its stock has traded within a 52-week range of $22.24 to $34.67.

Broyhill Asset Management stated the following regarding Rentokil Initial plc (NYSE:RTO) in its Q2 2026 investor letter:

"Rentokil Initial plc (NYSE:RTO) declined 9%. North American pest organic growth of 2.8% was entirely price, and customer retention remains near 80%. Our thesis is that the significant valuation discount to peer Rollins (almost half at the end of the second quarter) narrows as the Terminix integration is delivered."

Rentokil Initial plc (NYSE:RTO) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 15 hedge fund portfolios held Rentokil Initial plc (NYSE:RTO) at the end of the second quarter, compared to 19 in the previous quarter. While we acknowledge the potential of Rentokil Initial plc (NYSE:RTO) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.