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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
WSO
Primary Facts
Industrial Distribution
Name:
-
Sector:
- 109946.00K
Industry:
272
CEO:
Mr. Albert Nahmad
Total Employees:
Mid Cap
Our Technological Advancement Rating
Our Rating:
3.110620381
5.936514439
Watsco, Inc. (XNYS:WSO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Targets/Price Insights
Previous Close ($) :
WATSCO, INC. (XNYS:WSO)
One Month Price Target:
Six Month Price Target :
$273.36
Likely Price in One Year's Time:
Ticker:
$280.17
Likely Trading Range Today Under (Normal Volatility)
$273.12
Price Upper limit ($) :
$288.35
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
P94
This week:
$261.32
This month :
$248.12
Other Primary facts
Market Cap:
38.99M
Market Cap Classification:
10.80B
Number of Shares
IPO Date:
A
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
-10.32%
$224.24
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$298.52
16.61%
$245.48
$321.52
Medium risk (<10%) entry points
Buy Call
Sell Call
$286.12
Buy Put:
Sell Put:
$222.48
$257.88
$291.03
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
Industrial Distribution
Sharpe Ratio:
WSO, is amongst the top 40% highest yielding stocks in terms of daily returns
Comparison:
3.08%
0.175059794
Sharpe ratio is 17.51% higher than the industry
Average Returns/Yield of
Industrial Distribution
Daily returns:
1
Weekly returns:
0.08%
Monthly returns:
0.40%
Yearly returns:
19.07%
Comparison of returns:
-0.133089253
Classification:
Average annual returns/yield (last 3 years) is -13.31% below industry average
Results of T-Test of Returns:
WSO is a riskier investment compared to Nasdaq (IXIC)
Statistical test of Returns:
0.89
Volatility (measured by Standard Deviation)
Daily Volatility:
& ratio is 58.82% higher than the market/S&P 500 average
Weekly Volatility:
1.95%
Monthly Volatility:
4.36%
Yearly Volatility:
8.72%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
38.02%
-44.54%
Value at Risk Analysis (VaR)
Daily VaR:
Volatility in last five trading days has been -44.54% below long-term volatility
Weekly VaR:
-3.93%
Monthly VaR:
-8.78%
How Much Can the price of
Industrial Distribution
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
Risk of crash in next 6/12 months: High (50-70%)
Worst case (decline):
$232.25
This translates to price declining to:
-15%
This translates to price declining to:
-60.83%
Severe Crash Probability
-17.56%
What is Value at Risk (VaR)?
Risk Fundamentals
6.18%
WSO is a 23.94% riskier investment compared to the market/S&P 500 & is 6.18% riskier than Nasdaq (IXIC)
WSO is a 23.94% riskier investment compared to the market/S&P 500
Beta Examination of
Industrial Distribution
0.894
Expected beta in 1 year's time:
0.385
Expected beta in 3 year's time:
0.632
Unlevered (debt free) Beta:
Beta in relation to market/S&P 500--0.89
Beta in relation to Nasdaq (XNAS):
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Beta in relation to all global stocks::
Beta is -29.31% below industry average
Beta Comparison & Analysis
Beta of competitors/peers::
0.733
-0.118
Average Industry Beta:
Beta is -11.85% lower than peers
-0.293120313
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
WACC is -11.28% below industry mean WACC
-47.44%
Alpha provided | Alpha Analysis
Alpha provided:
0.893
-0.038
6.235
Analysis of Cost of Capital of
Industrial Distribution
Equity cost of capital:
Alpha is 623% higher than market/& is unsustainably high
-0.215
Unlevered (without debt) cost of capital:
Equity cost of capital is -21.50% below industry mean WACC
Before-tax cost of debt:
7.61%
After-tax cost of debt:
0.26%
Overall debt rating:
0.20%
Weighted average cost of capital (WACC):
0.26%
-11.28%
Key Per-Share Metrics & Analysis
Revenue per share:
Present value of the expected future dividends only: $140.64
Revenue growth rate per share of (3Y):
Price to sales ratio is -11.93% below the industry mean
135.93%
EPS:
Four Hundred Six Million Two Hundred Seventy-One Thousand Two Hundred Fifty Dollars
Expected Annual growth rate of EPS (3Y):
-
-0.61%
Free cash flow (FCF) per share:
Price to book ratio is -8.34% below the industry mean
-
0.706103193
Debt per share
Debt repayment rate in last quarter: 0.15%
EBITDA per share
Each employee generates 51% more EBITDA than industry average revenue per employee
Valuation Analysis Today of
Industrial Distribution
P/E Ratio:
Sustainable growth rate is -47.44% below industry average
P/E Ratio of Competitors/Peers:
25.24
-0.022796517
316.3916017
-0.140305879
$7.20
Share value as per dividend discount (DDM) model: $154.08
P/S (Price to Sales ratio):
$171.00
-0.119274261
P/B (Price to book value ratio):
Price to sales ratio is -11.93% below the industry mean
-
-
Net income growth rate (3Y):
Annual revenue growth rate is 135.93% above the industry average
-426.87%
Dividend Analysis
Net income growth rate is -426.87% lower than the industry average net income growth rate
Dividend payout rate: 15.88%
$2.20
Previous Dividend: $2.20
Previous adjusted dividend: $2.20
Previous Dividend: $8.05
Expected next dividend best case: $2.35
Expected next dividend worst case: $2.05
Average dividend payment (long-term): $1.85
Average dividend increase/decrease (growth rate) % per period: 3.36%
Expected next dividend payment date: 28/07/2022
Expected next dividend record date: 13/07/2022
-
Previous dividend payment date: 29/04/2022
Previous dividend record date: 14/04/2022
Dividend History:
-
2022-01-13--$1.95
2021-07-14--$1.95
2022-04-13--$2.20
2021-10-14--$1.95
2021-04-14--$1.95
-1.26042913
In-depth Debt & Leverage Analysis
Debt to equity ratio:
26.34%
Net debt to equity ratio:
The remaining useful life of property plant & equipment is: 2.0 years
Debt to assets ratio:
13.08%
Net debt to assets ratio:
27.72%
-68.21%
Ability to repay debt:
Interest coverage ratio:
Debt-to-asset ratio is -68.21% below industry average
3.31
Looking forward:
Debt growth rate:
1.2x
655.31%
0.15%
Analysis of Key Statistics
Correlation of price movement with the market:
16.23922373
Statistical significance of correlation:
-0.25%
Average Correlation of the industry with the market:
0.527
-4.83%
R Squared (percentage of price movement explained by movement of the market):
0.527
Correlation of price movement with Nasdaq (^IXIC):
0.278
Covariance of price movement with the market:
0.006
Kurtosis
0.007
9.521
Skewness of returns:
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
0.513
Fundamental Analysis & Dupont Analysis of
Industrial Distribution
Gross Profit Margin Ratio:
1.82B
Operating Profit Margin Ratio:
Net profit margin is 11.31% higher than the industry
66.48%
Net Profit Margin Ratio:
1.82B
Effective Tax Rate:
1.67%
0.041535487
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
Return on assets (ROA) is 38.71% higher than the industry
6.98%
Financial Leverage
Asset Turnover Ratio (ROA):
Operating profit margin is 66.48% higher than the industry
38.71%
Financial Leverage:
Interest coverage ratio is 330.54% more than industry average
Current Ratio:
Return on equity (ROE) is 6.98% higher than the industry
0.112652882
Cash Conversion Cycle (days):
$12.27
0.958750818
Current ratio is 11.27% above industry average
Stock based compensation to net income ratio:
Equity growth rate per share is 70.61% higher than the industry
In-depth Efficiency Analysis
Revenue generated per employee:
Cash conversion cycle is 95.88% above industry average
0.722868475
EBITDA generated per employee:
Each employee generates 72% more revenue than industry average revenue per employee
0.50830725
Profit generated per employee:
$16.83
77%
Free cash flow (FCF) generated per employee:
Each employee generates 77% more net income/profit than industry average revenue per employee
128.2637435
Assets/Capital per employee
Each employee generates 12826% more free cash flow than industry average revenue per employee
128.2637435
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
Industrial Distribution
$365.99
BOOZ ALLEN HAMILTON HOLDING CORPORATION (XNYS:BAH)
SNAP-ON INCORPORATED (XNYS:SNA)
GFL ENVIRONMENTAL INC. (XNYS:GFL)
PENTAIR PUBLIC LIMITED COMPANY (XNYS:PNR)
ALLEGION PUBLIC LIMITED COMPANY (XNYS:ALLE)
LENNOX INTERNATIONAL INC. (XNYS:LII)
ROBERT HALF INTERNATIONAL INC. (XNYS:RHI)
CARLISLE COMPANIES INCORPORATED (XNYS:CSL)
Current Analyst Ratings
$12.25
Strong buy�13%
Buy�13%
Hold�25%
Sell�4%
Strong sell�0%
Income Statement
Period:
3/31/2022
Date:
Value
Revenue:
TTM
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.67B
4.84B
110%
-
-
1.12B
-
-
5.97B
-
1.47M
28.82M
39%
148.73M
2.58M
43%
148.73M
Statement of Cash Flow
Date:
Period:
134.89M
Differed Income Tax :
7.59M
Stock Based Compensation :
-
Change in Working Capital :
7.97M
Accounts Receivables:
- 257249.00K
Other Working Capital:
107.76M
Other Non-Cash Items:
474.00K
Net Cash Provided by Operating Activities:
5.17M
Investments in PP&E:
- 101622.00K
Net Acquisitions:
-
Purchases of Investments:
- 47.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
Value
3/31/2022
2022
Q1
110.61M
-
110.61M
790.01M
1.39B
29.21M
2.32B
404.05M
434.14M
188.00M
118.85M
-
8.73M
1.15B
-
3.47B
462.57M
86.81M
-
-
287.46M
836.84M
478.30M
-
556.34M
-
1.39B
21.91M
798.30M
- 31241.0K
Value
1.12B
936.24M
1.73B
3.12B
-
565.11M
-
-
- 8171.00K
- 8218.00K
- 713.00K
4.42M
-
- 75795.00K
173.50M
101.41M
767.00K
- 7661.00K
110.61M
118.27M
- 101622.00K
- 8324.00K
Our Proprietary Portfolio Rating
Our Rating:
122.98868
Price Forecast/Expected Price in Next 5 Years of
Industrial Distribution
2023
2024
2025
2026
2027
289.79175
$289.79
$307.21
$325.67
$345.24