Baird Financial Group Inc. Cuts Stock Holdings in Watsco, Inc. $WSO

Key Points

• Baird Financial Group reduced its Watsco stake by 7.6% in the second quarter, selling 9,297 shares and retaining 112,909 shares worth approximately $47.1 million. Institutional investors collectively own 89.71% of Watsco.
• Watsco shares opened at $309.90, down 1.9%, and have declined substantially from their 52-week high of $459. The company’s latest quarterly results missed estimates, with EPS of $4.00 versus the $4.41 consensus and revenue of $2.10 billion versus $2.14 billion expected.
• Watsco paid a quarterly dividend of $3.30 per share, equivalent to an annualized $13.20 dividend and a 4.3% yield. Analysts maintain a consensus “Hold” rating with an average price target of $395.50.

Baird Financial Group Inc. lowered its position in Watsco, Inc. (NYSE:WSO - Free Report) by 7.6% in the second quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 112,909 shares of the construction company's stock after selling 9,297 shares during the period. Baird Financial Group Inc. owned about 0.27% of Watsco worth $47,053,000 as of its most recent filing with the Securities & Exchange Commission.

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

Watsco Stock Down 1.9%

NYSE:WSO opened at $309.90 on Thursday. The company has a market capitalization of $12.78 billion, a PE ratio of 26.88 and a beta of 1.05. Watsco, Inc. has a 52-week low of $295.75 and a 52-week high of $459.00. The stock has a fifty day simple moving average of $340.26 and a 200-day simple moving average of $376.25.

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

Watsco Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were paid a dividend of $3.30 per share. This represents a $13.20 dividend on an annualized basis and a dividend yield of 4.3%. The ex-dividend date of this dividend was Thursday, July 16th. Watsco's dividend payout ratio (DPR) is 114.48%.

Analyst Ratings Changes

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