11 Best Buy-the-Dip Stocks to Buy Now

6. Watsco, Inc. (NYSE:WSO)

Closing Price as on April 28: $455.78

52-week Low: $439.08

Number of Hedge Fund Holders: 33

Watsco, Inc. (NYSE:WSO) is engaged in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies. The company possesses a healthy balance sheet, evidenced by $432 million of cash, no outstanding debt, and $3 billion of shareholders’ equity. As a result, the company has been making investments to fuel growth and gain market share. From 1989 through 2024, Watsco, Inc. (NYSE:WSO) has seen a 19% CAGR for total shareholder return, exhibiting healthy performance throughout most macroeconomic and industry cycles.

Watsco, Inc. (NYSE:WSO)’s Q1 2025 results demonstrate initial stages of a large-scale product transition from regulatory changes that came into effect on January 1, 2025. These affect ~55% of the company’s sales and can ultimately convert ~$1 billion of inventory over the year. Watsco, Inc. (NYSE:WSO) has built a robust inventory position ahead of the selling season to help its customers compete and gain share as the transition unfolds. Overall, the company’s scale, technology platforms, OEM relationships, and entrepreneurial ownership culture are expected to act as competitive advantages that can help it position itself favorably.  The company continues to target a long-term gross profit margin of 30%.