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Watsco (WSO) is a Top-Ranked Growth Stock: Should You Buy?

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why This 1 Growth Stock Should Be On Your Watchlist

Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Watsco (WSO)

Incorporated in Florida in 1956, Watsco is the largest distributor of Heating, ventilation and air conditioning equipment, as well as related parts and supplies (HVAC/R) in North America. It distributes residential and commercial air conditioners; parts such as replacement compressors, evaporator coils and motors; as well as supplies such as thermostats, insulation materials, refrigerants, grills, registers, sheet metal, tools, concrete pads, tape, and adhesives. Its air conditioning and heating equipment is sold to the residential replacement market, the commercial market and the residential new construction market.

WSO is a Zacks Rank #3 (Hold) stock, with a Growth Style Score of B and VGM Score of B. Earnings are expected to grow 34.8% year-over-year for the current fiscal year, with sales growth of 15.3%.

Four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.07 to $14.53 per share for 2022. WSO boasts an average earnings surprise of 19.4%.

On a historic basis, Watsco has generated cash flow growth of 18.9%, and is expected to report cash flow expansion of 51.3% this year.

WSO should be on investors' short lists because of its impressive growth fundamentals, a good Zacks Rank, and strong Growth and VGM Style Scores.


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