With the Apocalypse Coming ...
... the world is going to need some serious pest control: Rollins.
With markets now in full new-school turmoil, so begins the search for old-school value. And how far wrong can any of us go, in these times of markets that go thump in the night, by looking at bugs? Not computer bugs. Or security bugs. Or viral flu bugs. Or any of that high tech nonsense. But simply, insects. Those ever annoying wasps, roaches, carpenter ants, termites, and all those other the little suckers that get into our homes and offices and remind us why we got off our butts way back when and civilized this hostile Earth of ours. Bugs stink! And for those who faced off against the likes of any of these vermin, we have directly touched on the limitless demand for the tools that keeps these pests at bay.
And the limitless demand for Rollins (NYSE: ROL): The Google of Pest Control.
So Good You Can’t Deal With It.
Rollins is is such a good business that one almost struggles to comprehend how sensible, wholesome and logical this operation is, compared to the otherwise messed up Post-Information Age we are all expected to invest in. Here is a large, well-managed company that brings economies of scale and access to cheap capital to the pest control business. And does it efficiently enough to enforce a reasonable prices -- and capture reasonable profits -- for its services. It is then rewarded with good customers, a reasonable global growth strategy and a bright quantifiable future, no matter what happens.
Take a look at its latest operating filings with the SEC. Not only did Total Assets, 3-month and 6-month revenues grow by a reasonably logical, something-like 10 percent, year over year. So did net operating cash flow, short and long term assets. And it has reported similar results for FORTY-FIVE quarters. Honestly, when was the last you saw a performance like that? And it’s earnings calls, with CEO Gary Rollins, are like a comfy chats around the business campfire. There is reasonable and prudent strategy for overseas business in Germany, United Kingdom and Singapore. There are new new efforts in controlling legionella, which has gotta be a good business. And new efforts to combat bed bugs, which in and of itself is a gold mine.
Sure, you can point out that last summer, Rollins missed predicted earnings by a penny. The pest control business can be seriously competitive, with applicators poaching clients, and going out in their own. And there are issues with innovation and treatment resistant bugs particularly overseas. But we can’t see with the coming quarter announcement, the biggest problem the have is a tight labor market, particularly in the United States. But what else is new.
Compared to the inherent risk of most other companies that face utter commoditization with business automation and destruction with Web security. And if we were ever to perform serious due diligence on this operation, we would be digging deeply into the succession planning. The Rollins family knows how valuable the company is. And there has been some bickering about how to best manage the operation.
But here is an operation that essentially gets paid from human sloth, mismanagement and bad planning. And we are not seeing any shortage of that in the coming years. In fact., if Rollins really starts tanking relative to other indexes, we can only hope the star cruiser to Mars is finally ready to board.
Because everything else left here on earth is going to be pretty darn messed up.
