- Watts posted a great second quarter, but the sharp rise in valuations for water stocks basically demands strong beat-and-raise quarters.
- Strong residential construction and repair/replace trends in non-resi are supporting demand today; repair/replace will likely fade a bit, but non-resi new-build activity should accelerate.
- Increased adoption of higher-margin smart technologies like leak detection, emergency shut-off, commercial hot water mixing, and ice/snowmelt can drive higher margins, with insurers incentivizing adoption/retrofit.
- Watts doesn't really work on the fundamentals, but the momentum is there both operationally and thematically.
For further details see:
Watts Water Tech Riding The Tsunami Of Water-Stock Love