Watsco, Inc. (NYSE:WSO) Short Interest Update

Key Points

• Short interest surged 25.6% in April to 3,667,025 shares (about 10.4% of shares short), producing a short-interest ratio of 7.6 days.
• Watsco beat Q1 estimates with EPS of $1.87 versus $1.73 and revenue of $1.53B versus $1.49B, though EPS fell from $1.93 a year earlier and revenue was essentially flat (+0.1% YoY).
• The board raised the quarterly dividend to $3.30 (annualized $13.20, ~3.1% yield), but the dividend payout ratio is a high 109%, indicating the payout exceeds current earnings.

Watsco, Inc. (NYSE:WSO - Get Free Report) saw a large increase in short interest in April. As of April 15th, there was short interest totaling 3,667,025 shares, an increase of 25.6% from the March 31st total of 2,918,875 shares. Based on an average daily volume of 481,208 shares, the short-interest ratio is presently 7.6 days. Currently, 10.4% of the shares of the stock are short sold.

Watsco Price Performance

NYSE WSO traded down $8.28 during trading hours on Friday, reaching $429.56. The company's stock had a trading volume of 345,064 shares, compared to its average volume of 470,398. The firm has a fifty day simple moving average of $398.25 and a 200-day simple moving average of $376.93. The stock has a market cap of $17.44 billion, a P/E ratio of 35.65 and a beta of 1.06. Watsco has a 52 week low of $323.05 and a 52 week high of $496.25.

Watsco (NYSE:WSO - Get Free Report) last issued its quarterly earnings data on Tuesday, April 28th. The construction company reported $1.87 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.73 by $0.14. The business had revenue of $1.53 billion during the quarter, compared to analyst estimates of $1.49 billion. Watsco had a net margin of 6.85% and a return on equity of 15.31%. The firm's quarterly revenue was up .1% on a year-over-year basis. During the same quarter last year, the business earned $1.93 EPS. On average, research analysts expect that Watsco will post 12.49 earnings per share for the current year.

Watsco Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, April 30th. Investors of record on Thursday, April 16th were issued a $3.30 dividend. This is a boost from Watsco's previous quarterly dividend of $3.00. The ex-dividend date was Thursday, April 16th. This represents a $13.20 dividend on an annualized basis and a yield of 3.1%. Watsco's dividend payout ratio (DPR) is 109.00%.

Wall Street Analyst Weigh In

A number of research firms have recently weighed in on WSO. Mizuho set a $425.00 price target on shares of Watsco in a research note on Wednesday, February 18th. Zacks Research upgraded shares of Watsco from a "strong sell" rating to a "hold" rating in a research note on Wednesday, February 25th. UBS Group started coverage on shares of Watsco in a report on Monday, January 5th. They issued a "neutral" rating and a $370.00 price objective for the company. Morgan Stanley dropped their price objective on shares of Watsco from $460.00 to $370.00 and set an "equal weight" rating for the company in a report on Wednesday, January 14th. Finally, JPMorgan Chase & Co. raised their price objective on shares of Watsco from $370.00 to $400.00 and gave the company a "neutral" rating in a report on Thursday, February 19th. One investment analyst has rated the stock with a Buy rating and eight have given a Hold rating to the company's stock. Based on data from MarketBeat.com, the company has a consensus rating of "Hold" and an average target price of $399.83.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in WSO. Capital International Investors raised its holdings in Watsco by 103.1% during the 4th quarter. Capital International Investors now owns 4,642,893 shares of the construction company's stock worth $1,564,423,000 after purchasing an additional 2,356,998 shares during the last quarter. M&T Bank Corp raised its holdings in Watsco by 60,779.4% during the 4th quarter. M&T Bank Corp now owns 599,662 shares of the construction company's stock worth $202,056,000 after purchasing an additional 598,677 shares during the last quarter. Norges Bank bought a new position in Watsco during the 4th quarter worth approximately $110,853,000. Corient Private Wealth LLC raised its holdings in Watsco by 202.6% during the 4th quarter. Corient Private Wealth LLC now owns 472,182 shares of the construction company's stock worth $159,102,000 after purchasing an additional 316,129 shares during the last quarter. Finally, Two Sigma Investments LP raised its holdings in Watsco by 12,054.4% during the 3rd quarter. Two Sigma Investments LP now owns 173,078 shares of the construction company's stock worth $69,975,000 after purchasing an additional 171,654 shares during the last quarter. Institutional investors own 89.71% of the company's stock.

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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