Heartland Advisors Inc. Boosts Stake in Watsco, Inc. $WSO

Key Points

• Heartland Advisors increased its Watsco stake by 14.3% in the first quarter, bringing its holdings to 51,593 shares worth about $18.8 million. Institutional ownership remains very high, with hedge funds and other investors owning 89.71% of the stock.
• Analyst sentiment on Watsco is mostly cautious: the stock has an average rating of Hold and an average price target of $402.71. Recent updates included mixed target increases and one upgrade from sell to hold.
• Watsco reported stronger-than-expected quarterly results, with EPS of $1.87 topping estimates and revenue of $1.53 billion above forecasts. The company also declared a quarterly dividend of $3.30 per share, implying a 3.5% yield.

Heartland Advisors Inc. boosted its position in Watsco, Inc. (NYSE:WSO - Free Report) by 14.3% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 51,593 shares of the construction company's stock after purchasing an additional 6,442 shares during the period. Watsco makes up approximately 1.0% of Heartland Advisors Inc.'s investment portfolio, making the stock its 21st biggest holding. Heartland Advisors Inc. owned approximately 0.13% of Watsco worth $18,769,000 at the end of the most recent quarter.

Several other large investors have also modified their holdings of the business. Capital International Investors raised its holdings in shares of Watsco by 103.1% in the fourth quarter. Capital International Investors now owns 4,642,893 shares of the construction company's stock worth $1,564,423,000 after buying an additional 2,356,998 shares during the period. Charles Schwab Investment Management Inc. boosted its holdings 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 valued at $525,634,000 after acquiring an additional 46,799 shares during the period. State Street Corp boosted 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 valued at $500,572,000 after acquiring an additional 16,595 shares during the period. Geode Capital Management LLC boosted 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 valued at $214,373,000 after acquiring an additional 5,176 shares during the period. Finally, M&T Bank Corp grew its position in Watsco by 60,779.4% in the 4th quarter. M&T Bank Corp now owns 599,662 shares of the construction company's stock valued at $202,056,000 after acquiring an additional 598,677 shares during the last quarter. Hedge funds and other institutional investors own 89.71% of the company's stock.

Analysts Set New Price Targets

A number of analysts have weighed in on WSO shares. Wall Street Zen upgraded Watsco from a "sell" rating to a "hold" rating in a research note on Saturday, May 2nd. DA Davidson assumed coverage on shares of Watsco in a research note on Tuesday, June 16th. They set a "neutral" rating and a $385.00 target price for the company. 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 stock an "equal weight" rating in a research note on Friday, July 10th. Finally, Stephens lifted their price objective on shares of Watsco from $475.00 to $485.00 and gave the company an "overweight" rating in a report on Wednesday, April 29th. One investment analyst has rated the stock with a Buy rating and nine have issued a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Hold" and an average price target of $402.71.

Watsco Stock Down 3.4%

Shares of NYSE:WSO opened at $372.20 on Friday. Watsco, Inc. has a 52-week low of $323.05 and a 52-week high of $494.94. The stock has a market cap of $15.13 billion, a P/E ratio of 30.89 and a beta of 1.02. The business's 50 day moving average is $389.40 and its 200 day moving average is $392.41.

Watsco (NYSE:WSO - Get Free Report) last released its quarterly earnings data on Tuesday, April 28th. The construction company reported $1.87 EPS for the quarter, topping the consensus estimate of $1.73 by $0.14. The company had revenue of $1.53 billion for the quarter, compared to the consensus estimate of $1.49 billion. Watsco had a return on equity of 15.31% and a net margin of 6.85%.Watsco's quarterly revenue was up .1% on a year-over-year basis. During the same period last year, the business posted $1.93 EPS. On average, sell-side analysts anticipate that Watsco, Inc. will post 12.81 EPS for the current fiscal year.

Watsco Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, July 31st. Stockholders of record on Thursday, July 16th will be paid a dividend of $3.30 per share. The ex-dividend date is Thursday, July 16th. This represents a $13.20 annualized dividend and a dividend yield of 3.5%. Watsco's dividend payout ratio (DPR) is currently 109.54%.

Watsco 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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