A Bug Exterminator That Trades Like Nvidia
Comment of the Day

July 24 2023

Commentary by Eoin Treacy

A Bug Exterminator That Trades Like Nvidia

This article from Bloomberg may be of interest to subscribers. Here is a section:

None of this bodes particularly well for humanity, of course, and there are signs that the warming climate could increase the demand for pest control even further into new areas. The termite population is getting hungrier. The mosquito season is growing longer. And some bugs, including the German cockroaches, are losing their sensitivity to existing pesticides. One way or another, Americans — led by those newly christened Floridians and Texas that arrived in the past several years — are going to have to learn to live in a world full of unpleasant critters, and that’s likely to add to the extermination industry’s reputation as a recession-proof juggernaut.

Eoin Treacy's view

 It seems inevitable that the next trend in asset management will be in climate survival funds. Many ESG funds were just another way to leverage up on technology bets and displayed high beta to the sector. That’s not quite as compelling following the roller coaster of the last few years.

Meanwhile, investors are much more concerned these days with governance than environmental metrics. The way to get investors on board is to appeal to their desire to boost returns. Expanding markets lead to expanding earnings. If the range and prevalence of insects is growing that’s an investment opportunity.

Both Rentokil and Rollins are breaking higher from well-defined range.

There is also a solid argument for investing in climate mitigation sectors like flood defenses, air conditioning demand and electricity generation capacity.  


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