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Is this Large Market Cap Stock target price reasonable for Watsco Inc. (NYSE:WSO)?

The company in question is, Watsco Inc. (NYSE:WSO) currently with a stock price of 143.33 (2.86% today). The market cap for Watsco Inc. is 5019.39, and is in the sector Services, and Electronics Wholesale industry. The target price for Watsco Inc. is 144.7. Currently Watsco Inc. is trading with a P/E of 28.25, and a forward P/E of 23.57. Average volume for Watsco Inc. is 166.54 and so far today it is 85945.

Performance in the last year for Watsco Inc. has been 13.52%. For EPS growth, Watsco Inc. has seen a growth of 13.40%, and is looking to grow in the next year to 11.28%. More long term stats show that EPS growth has been 14.60% over the last five years and could be 11.25% for the next five years. Watsco Inc. has seen sales growth quarter over quarter at -0.70%, with EPS growth quarter over quarter at -2.00%. The 20-day simple moving average is 0.39%, with the 200-day simple moving average coming to 8.94%.

Since the IPO date for Watsco Inc. on the 06/07/1984, Watsco Inc. has seen performance year to date to be 22.27%. With Watsco Inc. trading at 143.33, the dividend yield is 3.01%, and the EPS is 4.93.

So could Watsco Inc., be undervalued? Well as said before P/E is 28.25. The PEG is 2.51, P/S is 1.21 and the P/B is at 4.52. The P/cash is 164.57, with P/free cash flow at 23.54.

Watsco Inc. ability to deal with debt shows that the current ratio is 3.5, and the quick ratio is 1.6. This is with long term debt/equity at 0.27, and total debt/equity at 0.27.

In terms of margins, Watsco Inc. has a gross margin of 24.40%, an operating margin of 8.00% and a profit margin of 3.90%.Payout ratio for Watsco Inc. is 62.80%. Return on assets come to 8.40% with return on investment coming to 19.30%.

Insider ownership for Watsco Inc., is at 0.10% and institutional ownership comes to 82.00%. Outstanding shares are at 36.02. While shares float is 26.28. The float short is currently 3.86%, and short ratio is 6.09.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Stephen Butters

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