Fenimore Asset Management Inc Trims Position in Watsco, Inc. $WSO

Key Points

• Fenimore Asset Management trimmed its Watsco stake by 13.9% to 60,859 shares (≈$20.5M); institutional ownership stands at about 89.7% while other large funds (e.g., Capital International) significantly boosted positions.
• Quarterly results beat expectations: Watsco reported $1.87 EPS vs. $1.73 consensus and $1.53B revenue vs. $1.49B est., although EPS dipped vs. last year and revenue was essentially flat (+0.1% YoY).
• Dividend increased to $3.30 per quarter (annualized $13.20, ~3.1% yield), with a notably high payout ratio of roughly 109.5%.

Fenimore Asset Management Inc decreased its position in shares of Watsco, Inc. (NYSE:WSO - Free Report) by 13.9% during the 4th quarter, according to its most recent disclosure with the SEC. The firm owned 60,859 shares of the construction company's stock after selling 9,842 shares during the period. Fenimore Asset Management Inc owned 0.15% of Watsco worth $20,506,000 as of its most recent SEC filing.

Several other institutional investors and hedge funds have also modified their holdings of WSO. Capital International Investors lifted its stake in shares of Watsco by 741.4% during the third quarter. Capital International Investors now owns 2,285,895 shares of the construction company's stock valued at $924,187,000 after buying an additional 2,014,233 shares during the period. M&T Bank Corp lifted its stake in shares of Watsco by 60,779.4% during the fourth quarter. M&T Bank Corp now owns 599,662 shares of the construction company's stock valued at $202,056,000 after buying an additional 598,677 shares during the period. Two Sigma Investments LP lifted its stake in shares of Watsco by 12,054.4% during the third quarter. Two Sigma Investments LP now owns 173,078 shares of the construction company's stock valued at $69,975,000 after buying an additional 171,654 shares during the period. Corient Private Wealth LLC lifted its stake in shares of Watsco by 106.4% during the second quarter. Corient Private Wealth LLC now owns 296,170 shares of the construction company's stock valued at $130,801,000 after buying an additional 152,662 shares during the period. Finally, DAVENPORT & Co LLC lifted its stake in shares of Watsco by 31.8% during the fourth quarter. DAVENPORT & Co LLC now owns 470,177 shares of the construction company's stock valued at $159,293,000 after buying an additional 113,333 shares during the period. Hedge funds and other institutional investors own 89.71% of the company's stock.

Watsco Stock Down 1.9%

Watsco stock opened at $429.56 on Friday. The firm has a fifty day moving average of $398.25 and a 200-day moving average of $377.02. Watsco, Inc. has a 52-week low of $323.05 and a 52-week high of $496.25. The firm has a market capitalization of $17.44 billion, a P/E ratio of 35.65 and a beta of 1.12.

Watsco (NYSE:WSO - Get Free Report) last issued its earnings results on Tuesday, April 28th. The construction company reported $1.87 EPS for the quarter, beating analysts' consensus estimates of $1.73 by $0.14. Watsco had a net margin of 6.85% and a return on equity of 15.31%. The business had revenue of $1.53 billion for the quarter, compared to the consensus estimate of $1.49 billion. During the same quarter last year, the firm posted $1.93 EPS. The business's revenue for the quarter was up .1% compared to the same quarter last year. On average, research analysts expect that Watsco, Inc. will post 12.62 EPS for the current fiscal year.

Watsco Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, April 30th. Stockholders of record on Thursday, April 16th were paid a $3.30 dividend. The ex-dividend date of this dividend was Thursday, April 16th. This represents a $13.20 dividend on an annualized basis and a dividend yield of 3.1%. This is a boost from Watsco's previous quarterly dividend of $3.00. Watsco's payout ratio is 109.54%.

Analyst Upgrades and Downgrades

WSO has been the topic of a number of recent analyst reports. JPMorgan Chase & Co. increased their price target on shares of Watsco from $370.00 to $400.00 and gave the stock a "neutral" rating in a research note on Thursday, February 19th. UBS Group initiated coverage on shares of Watsco in a research note on Monday, January 5th. They set a "neutral" rating and a $370.00 price target on the stock. Wall Street Zen raised shares of Watsco from a "sell" rating to a "hold" rating in a research note on Saturday. Zacks Research raised shares of Watsco from a "strong sell" rating to a "hold" rating in a research note on Wednesday, February 25th. Finally, Mizuho set a $425.00 price target on shares of Watsco in a research note on Wednesday, February 18th. One research analyst has rated the stock with a Buy rating and eight have given a Hold rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Hold" and a consensus target price of $399.83.

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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