Tudor Investment Corp ET AL Cuts Stake in Watsco, Inc. $WSO

Key Points

• 84.4% stake cut: Tudor Investment Corp ET AL reduced its holdings in Watsco by 84.4% in Q3, selling 43,694 shares and ending the quarter with 8,080 shares worth $3.267 million.
• Big institutional shift: Capital International Investors boosted its stake by 741.4% to 2,285,895 shares (about $924.2 million), and institutional investors now own 89.71% of Watsco.
• Mixed results and dividend hike: Watsco missed Q results (EPS $1.68 vs. $1.94 expected; revenue $1.58B vs. $1.62B, down 9.9% YoY) but raised its quarterly dividend to $3.30 ($13.20 annual, ~3.2% yield).

Tudor Investment Corp ET AL reduced its holdings in shares of Watsco, Inc. (NYSE:WSO - Free Report) by 84.4% during the 3rd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 8,080 shares of the construction company's stock after selling 43,694 shares during the period. Tudor Investment Corp ET AL's holdings in Watsco were worth $3,267,000 at the end of the most recent quarter.

Several other large investors have also recently added to or reduced their stakes in the business. Capital International Investors increased its stake in Watsco by 741.4% during the 3rd quarter. Capital International Investors now owns 2,285,895 shares of the construction company's stock worth $924,187,000 after buying an additional 2,014,233 shares during the period. State Street Corp increased its stake 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. Hamlin Capital Management LLC increased its stake in Watsco by 13.3% during the 3rd quarter. Hamlin Capital Management LLC now owns 405,480 shares of the construction company's stock worth $163,936,000 after buying an additional 47,643 shares during the period. Captrust Financial Advisors increased its position in shares of Watsco by 0.4% in the 3rd quarter. Captrust Financial Advisors now owns 390,480 shares of the construction company's stock valued at $157,871,000 after purchasing an additional 1,376 shares during the last quarter. Finally, DAVENPORT & Co LLC increased its position in shares of Watsco by 11.2% in the 3rd quarter. DAVENPORT & Co LLC now owns 356,844 shares of the construction company's stock valued at $143,748,000 after purchasing an additional 36,010 shares during the last quarter. 89.71% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on the stock. Zacks Research raised shares of Watsco from a "strong sell" rating to a "hold" rating in a research report on Wednesday, February 25th. JPMorgan Chase & Co. increased their price objective on shares of Watsco from $370.00 to $400.00 and gave the company a "neutral" rating in a research report on Thursday, February 19th. Mizuho set a $425.00 price objective on shares of Watsco in a research report on Wednesday, February 18th. KeyCorp reissued a "sector weight" rating on shares of Watsco in a research report on Friday, December 12th. Finally, UBS Group assumed coverage on shares of Watsco in a research report on Monday, January 5th. They issued a "neutral" rating and a $370.00 price objective on the stock. One equities research analyst has rated the stock with a Buy rating and eight have given a Hold rating to the company's stock. According to MarketBeat.com, Watsco presently has a consensus rating of "Hold" and an average price target of $409.00.

Watsco Price Performance

Shares of NYSE:WSO opened at $408.86 on Friday. The stock has a market cap of $16.60 billion, a P/E ratio of 33.76 and a beta of 1.06. The firm has a fifty day moving average price of $393.13 and a 200 day moving average price of $373.60. Watsco, Inc. has a 1-year low of $323.05 and a 1-year high of $518.00.

Watsco (NYSE:WSO - Get Free Report) last issued its quarterly earnings results on Tuesday, February 17th. The construction company reported $1.68 earnings per share for the quarter, missing analysts' consensus estimates of $1.94 by ($0.26). The business had revenue of $1.58 billion for the quarter, compared to analyst estimates of $1.62 billion. Watsco had a return on equity of 15.49% and a net margin of 6.87%.The firm's revenue for the quarter was down 9.9% on a year-over-year basis. During the same quarter in the prior year, the company earned $2.37 EPS. Sell-side analysts expect that Watsco, Inc. will post 14.62 EPS for the current fiscal year.

Watsco Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, April 30th. Investors of record on Thursday, April 16th will be paid a dividend of $3.30 per share. The ex-dividend date is Thursday, April 16th. This represents a $13.20 dividend on an annualized basis and a yield of 3.2%. This is an increase from Watsco's previous quarterly dividend of $3.00. Watsco's dividend payout ratio (DPR) is currently 109.00%.

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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