Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings.
However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.
Watts Water Technologies (WTS) excels as a Caviar Cruise quality stock with strong revenue growth, a 41.98% ROIC, minimal debt, and high earnings quality.
The stocks in this article are all trading near their 52-week highs.
This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential.
However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial.
Since August 2020, the S&P 500 has delivered a total return of 90.8%. But one standout stock has more than doubled the market - over the past five years, Watts Water Technologies has surged 189% to $272.75 per share. Its momentum hasn’t stopped as it’s also gained 23.9% in the last six months thanks to its solid quarterly results, beating the S&P by 18.5%.
Water management manufacturer Watts Water (NYSE:WTS) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 7.8% year on year to $643.7 million. Its non-GAAP profit of $3.09 per share was 17.7% above analysts’ consensus estimates.
Water management manufacturer Watts Water (NYSE:WTS) announced better-than-expected revenue in Q2 CY2025, with sales up 7.8% year on year to $643.7 million. Its non-GAAP profit of $3.09 per share was 17.7% above analysts’ consensus estimates.
Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
Let’s dig into the relative performance of Watts Water Technologies (NYSE:WTS) and its peers as we unravel the now-completed Q1 water infrastructure earnings season.
Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems confused about where we could go next.
This uncertainty has led to a flat return for the industry over the past six months while the S&P 500 was up 4.5%.
Watts Water Technologies (NYSE:WTS) is a quality stock with strong ROIC, low debt, and solid cash flow. Its fundamentals make it a candidate for long-term investors.
Water management manufacturer Watts Water (NYSE:WTS) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, but sales fell by 2.3% year on year to $558 million. Its non-GAAP profit of $2.37 per share was 11.3% above analysts’ consensus estimates.
Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital.
The select few that can do all three for many years are often the ones that make you life-changing money.
A cash-heavy balance sheet is often a sign of strength, but not always.
Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
The stocks in this article are all trading near their 52-week highs.
This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
