65,975 Shares in Watsco, Inc. $WSO Acquired by Giverny Capital Inc.

Key Points

• Giverny Capital acquired 65,975 Watsco shares worth approximately $27.5 million, representing about 0.16% of the company and 0.9% of Giverny’s portfolio. Institutional investors collectively own 89.71% of Watsco.
• Analysts maintain a largely cautious view, with a consensus “Hold” rating and $395.50 price target; recent targets range from $330 to $485.
• Watsco’s shares opened at $314.52, well below their 12-month high of $459.00, after the company missed quarterly earnings and revenue estimates. It declared a $3.30 quarterly dividend, equivalent to a 4.2% annualized yield, though its payout ratio exceeds 100%.

Giverny Capital Inc. purchased a new stake in Watsco, Inc. (NYSE:WSO - Free Report) in the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The institutional investor purchased 65,975 shares of the construction company's stock, valued at approximately $27,494,000. Watsco accounts for approximately 0.9% of Giverny Capital Inc.'s portfolio, making the stock its 29th biggest position. Giverny Capital Inc. owned approximately 0.16% of Watsco as of its most recent SEC filing.

Other institutional investors and hedge funds have also recently added to or reduced their stakes in the company. California State Teachers Retirement System grew its stake in shares of Watsco by 35,175.5% in the second quarter. California State Teachers Retirement System now owns 19,402,949 shares of the construction company's stock worth $8,085,791,000 after purchasing an additional 19,347,945 shares during the last quarter. Capital International Investors raised its position in Watsco by 103.1% during the 4th quarter. Capital International Investors now owns 4,642,893 shares of the construction company's stock worth $1,564,423,000 after purchasing an additional 2,356,998 shares during the last quarter. Charles Schwab Investment Management Inc. raised its position in Watsco by 3.1% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 1,559,965 shares of the construction company's stock worth $525,634,000 after purchasing an additional 46,799 shares during the last quarter. State Street Corp lifted its holdings in Watsco by 1.4% during the 3rd quarter. State Street Corp now owns 1,238,121 shares of the construction company's stock worth $500,572,000 after buying an additional 16,595 shares during the period. Finally, Geode Capital Management LLC lifted its holdings in Watsco by 0.8% during the 4th quarter. Geode Capital Management LLC now owns 638,014 shares of the construction company's stock worth $214,373,000 after buying an additional 5,176 shares during the period. 89.71% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several brokerages have recently weighed in on WSO. DA Davidson decreased 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. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Watsco in a research note on Friday, June 26th. Stephens reiterated an "overweight" rating and issued a $485.00 target price on shares of Watsco in a report on Monday, August 17th. Robert W. Baird set a $400.00 target price on shares of Watsco in a research report on Thursday, July 30th. Finally, Morgan Stanley raised their price target on shares of Watsco from $370.00 to $405.00 and gave the stock an "equal weight" rating in a report on Friday, July 10th. Two analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company's stock. According to data from MarketBeat, the stock has a consensus rating of "Hold" and a consensus target price of $395.50.

Watsco Trading Down 0.2%

Shares of WSO opened at $314.52 on Monday. The firm's fifty day simple moving average is $346.18 and its two-hundred day simple moving average is $378.45. Watsco, Inc. has a 12 month low of $295.75 and a 12 month high of $459.00. The stock has a market capitalization of $12.97 billion, a P/E ratio of 27.28 and a beta of 1.05.

Watsco (NYSE:WSO - Get Free Report) last posted its quarterly earnings data on Wednesday, July 29th. The construction company reported $4.00 earnings per share for the quarter, missing the consensus estimate of $4.41 by ($0.41). The business had revenue of $2.10 billion during the quarter, compared to the consensus estimate of $2.14 billion. Watsco had a return on equity of 14.40% and a net margin of 6.53%.The business's revenue was up 2.1% on a year-over-year basis. During the same period last year, the business posted $4.52 earnings per share. As a group, research analysts predict that Watsco, Inc. will post 12.21 EPS for the current fiscal year.

Watsco Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, July 31st. Shareholders of record on Thursday, July 16th were paid a $3.30 dividend. The ex-dividend date of this dividend was Thursday, July 16th. This represents a $13.20 annualized dividend and a yield of 4.2%. Watsco's payout ratio is 114.48%.

About Watsco

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.

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