Arrowstreet Capital Limited Partnership Makes New Investment in Watsco, Inc. $WSO

Key Points

• Arrowstreet Capital initiated a Watsco position by purchasing 4,630 shares valued at approximately $1.68 million. Institutional investors and hedge funds collectively own 89.71% of the company.
• Watsco’s latest quarterly results fell short of expectations, with EPS of $4.00 versus the $4.41 consensus and revenue of $2.10 billion versus $2.14 billion expected. Revenue nonetheless increased 2.1% year over year.
• The company paid a quarterly dividend of $3.30 per share, equivalent to a $13.20 annualized payout and a 4.0% yield. Analysts maintain a consensus “Hold” rating with a $395.50 price target.

Arrowstreet Capital Limited Partnership purchased a new position in shares of Watsco, Inc. (NYSE:WSO - Free Report) in the 1st quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor purchased 4,630 shares of the construction company's stock, valued at approximately $1,684,000.

Other institutional investors also recently bought and sold shares of the company. Torren Management LLC acquired a new stake in shares of Watsco in the fourth quarter valued at about $26,000. Bayban acquired a new position in Watsco during the fourth quarter worth about $29,000. Bamco Inc. NY purchased a new stake in Watsco during the 4th quarter valued at about $35,000. Laurel Wealth Advisors LLC purchased a new stake in Watsco during the 4th quarter valued at about $37,000. Finally, Quarry LP acquired a new stake in Watsco in the 4th quarter valued at about $37,000. 89.71% of the stock is currently owned by institutional investors and hedge funds.

Watsco Stock Performance

Shares of WSO opened at $333.60 on Thursday. The stock has a market capitalization of $13.56 billion, a PE ratio of 28.93 and a beta of 1.05. Watsco, Inc. has a 1 year low of $300.66 and a 1 year high of $459.00. The company's 50-day simple moving average is $376.46 and its 200-day simple moving average is $391.46.

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 analysts' consensus estimates of $4.41 by ($0.41). Watsco had a return on equity of 14.40% and a net margin of 6.53%.The company had revenue of $2.10 billion for the quarter, compared to analysts' expectations of $2.14 billion. During the same period in the prior year, the company posted $4.52 EPS. The firm's revenue was up 2.1% compared to the same quarter last year. On average, sell-side analysts predict that Watsco, Inc. will post 12.43 earnings per share for the current year.

Watsco Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were given a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a dividend yield of 4.0%. The ex-dividend date was Thursday, July 16th. Watsco's payout ratio is currently 114.48%.

Analyst Upgrades and Downgrades

A number of brokerages recently commented on WSO. Stephens lifted their price objective on Watsco from $475.00 to $485.00 and gave the stock an "overweight" rating in a research report on Wednesday, April 29th. Morgan Stanley raised their target price on Watsco from $370.00 to $405.00 and gave the stock an "equal weight" rating in a research note on Friday, July 10th. Weiss Ratings reiterated a "hold (c)" rating on shares of Watsco in a report on Friday, June 26th. Wall Street Zen upgraded Watsco from a "sell" rating to a "hold" rating in a report on Saturday, May 2nd. Finally, DA Davidson lowered their price target on shares of Watsco from $385.00 to $330.00 and set a "neutral" rating on the stock in a research report on Thursday, July 30th. Two analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of "Hold" and a consensus 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.

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