Is Republic Services (RSG) an Attractively Valued Stock?

Core Viewpoint - The London Company Large Cap Strategy's fourth-quarter 2025 investor letter indicates a mixed market environment with US equities showing higher returns, while the portfolio underperformed compared to the Russell 1000 Index due to volatility and concentrated market leadership [1]. Group 1: Market Performance - In Q4 2025, US equities experienced a 2.4% increase in the Russell 3000 Index, marking the third consecutive quarter of higher returns [1]. - The London Company Large Cap portfolio returned 0.4% (0.2% net), underperforming the Russell 1000 Index's 2.4% increase [1]. Group 2: Economic Outlook - The economic and policy backdrop heading into 2026 presents a mix of confidence and doubt, with the portfolio aiming to support long-term wealth creation while managing downside risk [1]. Group 3: Republic Services, Inc. (NYSE:RSG) - Republic Services, Inc. is highlighted as a leading environmental services company with a market capitalization of $67.701 billion [2]. - The stock closed at $216.84 per share on February 18, 2026, with a one-month return of -0.51% and a 12-month increase of 6.07% [2]. - The London Company increased its exposure to Republic Services, citing its defensive and resilient business model despite short-term headwinds in the waste management industry [3]. - Operational strength through pricing power and cost controls has led to stronger margins for Republic Services [3]. - Recent insider buying is viewed as a positive indicator of the company's attractive valuation [3]. Group 4: Hedge Fund Interest - Republic Services is not among the 30 most popular stocks among hedge funds, with 51 hedge fund portfolios holding the stock at the end of Q3 2025, down from 60 in the previous quarter [4]. - While acknowledging Republic Services' potential, the company believes certain AI stocks may offer greater upside potential and less downside risk [4].