In order to balance out my large cap heavy portfolio I started searching for sub-10 billion companies. Rollins (ROL) was one that showed up in my screener that had me curious because it met a lot of the Lynch metrics. For one "Rollins" is a boring name and according to Marketwatch there are only 4 analyst watching it. In fact this company is so boring Google finance didn't even have a link to their website and after reading the description I still didn't know who they were. Once I found the website I realized this is a parent corporation for many pest control companies, one of which is Orkin which I have heard of.
Rollins is a profitable company with good operating margins above 10% and high ROA and ROE with no debt. It's EPS has also consistently grown an average of 10% over the past 10 years. They are a global company and have a strong position in the sector with few competitors and a business that's recession proof.
While most of my Lynch and Graham metrics were met, the stock's high PE ratio of 35 isn't justified by its low growth rate of 10%. This is one I'll revisit when either the growth rate picks up to over 15% or the PE drops to around 25.
