Polen Capital , an investment management company, released its "Polen Focus Growth Strategy" Q3 2026 investor letter. A copy of the letter can be downloaded here. The fund outperformed the Russell 1000 Growth Index in the third quarter of 2026, as investors began distinguishing between businesses vulnerable to artificial intelligence disruption and those positioned to benefit from AI adoption. The Portfolio returned 4.46% net of fees, outperforming the Index's 0.92% gain by 3.54 percentage points. However, its year-to-date net return remained negative at 8.11%, compared with a 6.30% gain for the benchmark. Strong relative contributions from software and services holdings helped offset weakness among semiconductor and other direct AI-capital-expenditure beneficiaries, which faced valuation pressure as investors reconsidered spending levels, financing, and future returns on infrastructure investment. The managers continued rebalancing the Portfolio toward businesses with attractive long-term growth prospects, stronger current momentum, and more visible demand, initiating positions in selected semiconductor equipment, power infrastructure, payments, and data-storage companies while trimming or exiting other holdings. The Portfolio also added to selected infrastructure and technology investments and maintained exposure to established software, services, internet, and information-based businesses. Looking ahead, Polen aims to maintain a balanced portfolio of competitively advantaged companies that can withstand shifts in market leadership. The managers remain constructive but cautious about persistent inflation, higher interest rates, energy costs, and valuations, particularly for businesses whose earnings potential lies further in the future. In addition, please check the Fund's top five holdings to know its best picks in 2026.
In its third-quarter 2026 investor letter, Polen Focus Growth Strategy highlighted stocks like Rollins, Inc. (NYSE: ROL ). Rollins, Inc. (NYSE:ROL) is a pest-control services company that provides residential and commercial pest management through brands including Orkin. The one-month return of Rollins, Inc. (NYSE:ROL) was 15.18% while its shares traded between $29.29 and $66.14 over the last 52 weeks. On October 22, 2026, Rollins, Inc. (NYSE:ROL) stock closed at approximately $36.31 per share, with a market capitalization of about $16.65 billion.
Polen Focus Growth Strategy stated the following regarding Rollins, Inc. (NYSE:ROL) in its Q3 2026 investor letter:
We also sold our position in Rollins, Inc. (NYSE:ROL). Our original thesis was based on steady organic growth, accretive acquisitions, pricing power, and margin expansion. However, recent difficulty in new business generation and the CFO resignation increased our concern that the thesis may no longer be playing out as expected. Given better opportunities elsewhere, we decided to redeploy the capital ( Click Here To Read The Letter In Detail ).
Rollins, Inc. (NYSE:ROL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . As per our database, 63 hedge fund portfolios held Rollins, Inc. (NYSE:ROL) at the end of the second quarter, which was 47 in the previous quarter. While we acknowledge the risk and potential of Rollins, Inc. (NYSE:ROL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Rollins, Inc. (NYSE:ROL) and that has 10,000% upside potential, check out our report about this cheapest AI stock .
In another article , we covered Rollins, Inc. (NYSE:ROL) and shared our thoughts on weaker consumer searches reported by the company. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
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This article is originally published at Insider Monkey .
