Gabelli: Watts Water Reports Solid 4Q11 Results

According to a research report published today by Gabelli, Watts Water Technologies'

sales increased 14% YOY, and EPS was in-line with expectations. Gabelli said in the report, “In January 2012, WTS announced price increases on selected products in the wholesale distribution channel to offset higher copper prices. These increases should be implemented over the next 2-3 months and should help improve the gross margin beginning in 2Q12. Further, copper price peaked around $4.40 a pound in July 2011, and then decline to about $3.10 to $3.50 a pound over the next 6 months, before settling to its current price of $3.75 a pound. It generally takes 6 months for the change in copper prices to work through WTS' P&L. In the 1H2012, WTS should benefit from the lower copper prices that began in July 2011.” Gabelli maintains its Buy rating on Watts Water, which closed yesterday at $41.11.