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WSO (Watsco) Piotroski F-Score : 5 (As of Oct. 31, 2024)


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What is Watsco Piotroski F-Score?

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Watsco has an F-score of 5 indicating the company's financial situation is typical for a stable company.

The historical rank and industry rank for Watsco's Piotroski F-Score or its related term are showing as below:

WSO' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Med: 5   Max: 8
Current: 5

During the past 13 years, the highest Piotroski F-Score of Watsco was 8. The lowest was 3. And the median was 5.


Watsco Piotroski F-Score Historical Data

The historical data trend for Watsco's Piotroski F-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Watsco Piotroski F-Score Chart

Watsco Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Piotroski F-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 3.00 4.00 5.00 5.00 4.00

Watsco Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Piotroski F-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.00 4.00 5.00 5.00 5.00

Competitive Comparison of Watsco's Piotroski F-Score

For the Industrial Distribution subindustry, Watsco's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Watsco's Piotroski F-Score Distribution in the Industrial Distribution Industry

For the Industrial Distribution industry and Industrials sector, Watsco's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Watsco's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Sep24) TTM:Last Year (Sep23) TTM:
Net Income was 82.547 + 87.004 + 181.41 + 171.031 = $522 Mil.
Cash Flow from Operations was 298.614 + 103.706 + 57.735 + 232.764 = $693 Mil.
Revenue was 1603.197 + 1564.991 + 2139.328 + 2160.036 = $7,468 Mil.
Gross Profit was 414.416 + 430.625 + 579.76 + 566.244 = $1,991 Mil.
Average Total Assets from the begining of this year (Sep23)
to the end of this year (Sep24) was
(4039.067 + 3729.182 + 4357.118 + 4395.324 + 4517.476) / 5 = $4207.6334 Mil.
Total Assets at the begining of this year (Sep23) was $4,039 Mil.
Long-Term Debt & Capital Lease Obligation was $305 Mil.
Total Current Assets was $3,133 Mil.
Total Current Liabilities was $933 Mil.
Net Income was 137.671 + 110.073 + 172.764 + 170.953 = $591 Mil.

Revenue was 1581.223 + 1550.641 + 2003.084 + 2126.845 = $7,262 Mil.
Gross Profit was 433.55 + 448.157 + 562.622 + 566.945 = $2,011 Mil.
Average Total Assets from the begining of last year (Sep22)
to the end of last year (Sep23) was
(3584.587 + 3488.214 + 3800.614 + 4103.011 + 4039.067) / 5 = $3803.0986 Mil.
Total Assets at the begining of last year (Sep22) was $3,585 Mil.
Long-Term Debt & Capital Lease Obligation was $390 Mil.
Total Current Assets was $2,731 Mil.
Total Current Liabilities was $888 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Watsco's current Net Income (TTM) was 522. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Watsco's current Cash Flow from Operations (TTM) was 693. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Sep23)
=521.992/4039.067
=0.12923579

ROA (Last Year)=Net Income/Total Assets (Sep22)
=591.461/3584.587
=0.16500116

Watsco's return on assets of this year was 0.12923579. Watsco's return on assets of last year was 0.16500116. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Watsco's current Net Income (TTM) was 522. Watsco's current Cash Flow from Operations (TTM) was 693. ==> 693 > 522 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep24)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Sep23 to Sep24
=305.412/4207.6334
=0.07258522

Gearing (Last Year: Sep23)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Sep22 to Sep23
=390.339/3803.0986
=0.1026371

Watsco's gearing of this year was 0.07258522. Watsco's gearing of last year was 0.1026371. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Sep24)=Total Current Assets/Total Current Liabilities
=3132.992/933.149
=3.35744024

Current Ratio (Last Year: Sep23)=Total Current Assets/Total Current Liabilities
=2730.572/887.628
=3.07625717

Watsco's current ratio of this year was 3.35744024. Watsco's current ratio of last year was 3.07625717. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Watsco's number of shares in issue this year was 40.339. Watsco's number of shares in issue last year was 36.579. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=1991.045/7467.552
=0.2666262

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2011.274/7261.793
=0.27696658

Watsco's gross margin of this year was 0.2666262. Watsco's gross margin of last year was 0.27696658. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Sep23)
=7467.552/4039.067
=1.84883093

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Sep22)
=7261.793/3584.587
=2.02583812

Watsco's asset turnover of this year was 1.84883093. Watsco's asset turnover of last year was 2.02583812. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+1+1+0+0+0
=5

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Watsco has an F-score of 5 indicating the company's financial situation is typical for a stable company.

Watsco  (NYSE:WSO) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Watsco Piotroski F-Score Related Terms

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Watsco Business Description

Traded in Other Exchanges
Address
2665 South Bayshore Drive, Suite 901, Miami, FL, USA, 33133
Watsco is the largest heating, ventilation, air conditioning, and refrigeration products distributor in North America. The company primarily operates in the United States (90% of 2023 revenue) with significant exposure in the Sunbelt states. Watsco also has operations in Canada (5% of sales) and Latin America (5% of sales). The company's customer base consists of more than 125,000 contractors that serve the replacement and new construction HVACR markets for residential and light commercial applications.
Executives
Ana Lopez-blazquez director 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
Valerie Schimel director 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
John Alexander Macdonald director 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
Stephen F. Rush officer: EVP and COO 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
John Michael Custer director 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
Brian E. Keeley director 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
Steven Rubin director 2665 S. BAYSHORE DRIVE, SUITE 901, MIAMI FL 33133
Barry S Logan officer: Senior Vice President
Watsco Inc director 2665 SOUTH BAYSHORE DR, STE 901, COCONUT GROVE FL 33133
Jason Epstein director % COLUMBUS ACQUISITION CORP, 153 EAST 53RD STREET 58TH FLOOR, NEW YORK NY 10022
United Technologies Corp /de/ 10 percent owner 1000 WILSON BLVD, ARLINGTON VA 22209
David C. Darnell director 100 NORTH TRYON STREET, CHARLOTTE NC 28255
Paul F Manley director C/O GENTA INC., TWO VANWAY, BERKELEY HEIGHTS NJ 07922
Bob L Moss director
Denise Dickins director 1867 TRAVIS CIRCLE, WEST PALM BEACH FL 33406

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