Giverny Capital Asset Management’s Investment Thesis for Watsco (WSO)

2 hours ago 1

Soumya Eswaran

Mon, February 2, 2026 astatine 7:27 AM CST 3 min read

Giverny Capital Asset Management, LLC, an concern absorption company, precocious published its fourth-quarter 2025 capitalist letter. A transcript of the aforesaid tin beryllium downloaded here. The Portfolio returned 0.01% compared to 2.66% for the S&P 500. YTD, the money returned 12.58% compared to 17.88% for the Index. The steadfast faced a challenging 4th fourth and calendar year, contempt coagulated appreciation. The outperformance of a fewer ample exertion companies has negatively impacted performance, fixed the portfolio's underweight successful ample tech and overweight successful smaller niche leaders. While portfolio companies are excelling successful net maturation and superior returns, the marketplace is fixated connected AI investments, leaving the existent benefits unclear. Additionally, you tin reappraisal the Portfolio’s apical 5 holdings to spot its champion picks for 2025.

In its fourth-quarter 2025 capitalist letter, Giverny Capital Asset Management highlighted Watsco, Inc. (NYSE:WSO) arsenic a caller portfolio holding. Watsco, Inc. (NYSE:WSO) is simply a starring distributor of aerial conditioning, heating, and refrigeration equipment, and related parts and supplies. On January 30, 2026, Watsco, Inc. (NYSE:WSO) banal closed astatine $386.45 per share. One-month instrumentality of Watsco, Inc. (NYSE:WSO) was 9.51%, and its shares mislaid 19.05% of their worth implicit the past 3 months. Watsco, Inc. (NYSE:WSO) has a marketplace capitalization of $15.72 billion.

Giverny Capital Asset Management stated the pursuing regarding Watsco, Inc. (NYSE:WSO) successful its 4th fourth 2025 capitalist letter:

"We initiated a 3.5% presumption successful Watsco, Inc. (NYSE:WSO), the country’s largest distributor of alleged HVAC systems – heating, ventilation and aerial conditioning. Its astir important narration is with Carrier, but it besides distributes products from Rheem, Daikin (Goodman) and others.

Watsco, Inc. (NYSE:WSO) is not connected our database of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge money portfolios held Watsco, Inc. (NYSE:WSO) astatine the extremity of the 3rd quarter, the aforesaid arsenic successful the erstwhile quarter. While we admit the imaginable of Watsco, Inc. (NYSE:WSO) arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.