ServiceMaster
Thesis
We recommend a long position in ServiceMaster due to its durable competitive position and strong cash flow generation abilities. The pest control industry has a long growth runway, and with a 3-year price target of $78, we see a 59% upside and an IRR of 20%.
Did it work?
The pitch promised a 3-year price target of $78 (59% upside, 20% IRR), and with 88 months elapsed the stated horizon is long past, but no price data was provided. Based on subsequent events, ServiceMaster (later renamed Terminix) never approached the $78 target; the company was ultimately acquired by Rentokil in 2022 at roughly $55 per share in equivalent value, implying only a modest total return from the implied ~$49 entry — far short of the promised 59% upside and 20% IRR. The qualitative industry thesis (durable pest-control franchise, consolidation potential) had some validity, but the core quantitative target was decisively missed.