Giverny Capital Inc. Makes New Investment in Watsco, Inc. $WSO

Giverny Capital Inc. purchased a new stake in Watsco, Inc. (NYSE:WSO) in the 2nd quarter, according to its most recent disclosure with the Securities & Exchange Commission. The fund purchased 65,975 shares of the construction company’s stock, valued at approximately $27,494,000. Watsco makes up about 0.9% of Giverny Capital Inc.’s investment portfolio, making the stock its 29th largest holding.

Other institutional investors have also recently made changes to their positions in the company. Bayban bought a new position in shares of Watsco in the 4th quarter worth $29,000. Bamco Inc. NY bought a new stake in Watsco during the 4th quarter valued at $35,000. Quarry LP bought a new stake in Watsco during the 4th quarter valued at $37,000. Western Wealth Management LLC acquired a new position in Watsco during the first quarter worth $41,000. Finally, Resources Management Corp CT ADV lifted its stake in shares of Watsco by 150.0% in the fourth quarter. Resources Management Corp CT ADV now owns 125 shares of the construction company’s stock valued at $42,000 after buying an additional 75 shares in the last quarter. Institutional investors and hedge funds own 89.71% of the company’s stock.

Watsco Price Performance

NYSE WSO opened at $314.52 on Monday. Watsco, Inc. has a 1 year low of $295.75 and a 1 year high of $459.00. The firm has a market cap of $12.97 billion, a price-to-earnings ratio of 27.28 and a beta of 1.05. The company has a fifty day moving average price of $346.18 and a 200-day moving average price of $378.45.

Watsco (NYSE:WSO) last announced its earnings results on Wednesday, July 29th. The construction company reported $4.00 EPS for the quarter, missing the consensus estimate of $4.41 by ($0.41). Watsco had a net margin of 6.53% and a return on equity of 14.40%. The firm had revenue of $2.10 billion during the quarter, compared to analysts’ expectations of $2.14 billion. During the same quarter in the prior year, the company earned $4.52 EPS. The business’s revenue for the quarter was up 2.1% on a year-over-year basis. On average, research analysts anticipate that Watsco, Inc. will post 12.21 EPS for the current fiscal year.

Watsco Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Friday, July 31st. Investors of record on Thursday, July 16th were given a dividend of $3.30 per share. The ex-dividend date was Thursday, July 16th. This represents a $13.20 annualized dividend and a yield of 4.2%. Watsco’s dividend payout ratio is presently 114.48%.

Analysts Set New Price Targets

A number of research analysts have recently issued reports on WSO shares. Robert W. Baird set a $400.00 price objective on shares of Watsco in a report on Thursday, July 30th. Weiss Ratings restated a “hold (c)” rating on shares of Watsco in a report on Friday, June 26th. Morgan Stanley raised their price target on shares of Watsco from $370.00 to $405.00 and gave the company an “equal weight” rating in a research report on Friday, July 10th. DA Davidson cut their price target on Watsco from $385.00 to $330.00 and set a “neutral” rating for the company in a research note on Thursday, July 30th. Finally, Stephens reissued an “overweight” rating and issued a $485.00 price objective on shares of Watsco in a research note on Monday, August 17th. Two analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company. According to MarketBeat.com, the company has an average rating of “Hold” and an average price target of $395.50.

Watsco Company Profile

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.