Watsco, Inc. (WSO) has increased its market share significantly through acquisitions. Since 1989, the company has acquired around 53 HVAC/R businesses. Despite the economic slowdown, Watsco continues to actively seek acquisition opportunities to allow further penetration into existing markets and expand into new geographic markets.

WSO is the largest distributor of air conditioning, heating, and refrigeration equipment, as well as related parts and supplies (HVAC/R), in the United States.

In our view, the company has plenty of room for growth. With the industry size approximated at $26 billion and annual growth set to grow well above 3%, Watsco represents a very small portion of the overall pie (8%). There are plenty of acquisition opportunities for the company as the HVAC/R distribution industry contains over 1,300 companies.

Apart from growth through acquisitions, Watsco aims to increase sales per location and gain market share by boosting its product offering.

The company recently formed a

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