Writing about Watts Water Technologies (NYSE:WTS) ("Watts") in late February, I said I preferred to wait in the hopes of seeing an even better entry price. The shares continued to slide through late June to mid-July, bottoming out below $117 before rebounding nicely since those doldrums.
I've been impressed with the execution at Watts, as management has leveraged a healthy retrofit/renovation market and improving new construction markets to gain share. I'm even more impressed with the strong margin execution against a backdrop of input and distribution cost pressures. As far as criticisms and concerns go, I do have some concerns about the impact of higher rates on new-builds, as well as a declining tailwind from renovation projects spurred by the pandemic. Valuation isn't superb, but this is a quality name leveraged to construction growth (balanced between non-residential and residential) and trends like energy efficiency and loss prevention.
Click the link for the full article:
Watts Water Tech: Strong Construction And Retrofit Markets, Boosted By Excellent Execution
No comments:
Post a Comment