*AC Investment Research empowers individual investors to make better trading decisions by providing machine learning based objective stock market analysis and forecast.

WSO Watsco Inc. Common Stock

Outlook: Watsco Inc. Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 22 Dec 2022 for (n+8 weeks)
Methodology : Modular Neural Network (Social Media Sentiment Analysis)

Abstract

The study of financial markets has been addressed in many works during the last years. Different methods have been used in order to capture the non-linear behavior which is characteristic of these complex systems. The development of profitable strategies has been associated with the predictive character of the market movement, and special attention has been devoted to forecast the trends of financial markets. (Sureshkumar, K.K. and Elango, N.M., 2012. Performance analysis of stock price prediction using artificial neural network. Global journal of computer science and Technology.) We evaluate Watsco Inc. Common Stock prediction models with Modular Neural Network (Social Media Sentiment Analysis) and Lasso Regression1,2,3,4 and conclude that the WSO stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

Key Points

  1. Which neural network is best for prediction?
  2. Is Target price a good indicator?
  3. Should I buy stocks now or wait amid such uncertainty?

WSO Target Price Prediction Modeling Methodology

We consider Watsco Inc. Common Stock Decision Process with Modular Neural Network (Social Media Sentiment Analysis) where A is the set of discrete actions of WSO stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Lasso Regression)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (Social Media Sentiment Analysis)) X S(n):→ (n+8 weeks) i = 1 n r i

n:Time series to forecast

p:Price signals of WSO stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

WSO Stock Forecast (Buy or Sell) for (n+8 weeks)

Sample Set: Neural Network
Stock/Index: WSO Watsco Inc. Common Stock
Time series to forecast n: 22 Dec 2022 for (n+8 weeks)

According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for Watsco Inc. Common Stock

  1. However, depending on the nature of the financial instruments and the credit risk information available for particular groups of financial instruments, an entity may not be able to identify significant changes in credit risk for individual financial instruments before the financial instrument becomes past due. This may be the case for financial instruments such as retail loans for which there is little or no updated credit risk information that is routinely obtained and monitored on an individual instrument until a customer breaches the contractual terms. If changes in the credit risk for individual financial instruments are not captured before they become past due, a loss allowance based only on credit information at an individual financial instrument level would not faithfully represent the changes in credit risk since initial recognition.
  2. Annual Improvements to IFRSs 2010–2012 Cycle, issued in December 2013, amended paragraphs 4.2.1 and 5.7.5 as a consequential amendment derived from the amendment to IFRS 3. An entity shall apply that amendment prospectively to business combinations to which the amendment to IFRS 3 applies.
  3. An entity shall apply this Standard retrospectively, in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, except as specified in paragraphs 7.2.4–7.2.26 and 7.2.28. This Standard shall not be applied to items that have already been derecognised at the date of initial application.
  4. In some circumstances an entity does not have reasonable and supportable information that is available without undue cost or effort to measure lifetime expected credit losses on an individual instrument basis. In that case, lifetime expected credit losses shall be recognised on a collective basis that considers comprehensive credit risk information. This comprehensive credit risk information must incorporate not only past due information but also all relevant credit information, including forward-looking macroeconomic information, in order to approximate the result of recognising lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition on an individual instrument level.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

Watsco Inc. Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) with Lasso Regression1,2,3,4 and conclude that the WSO stock is predictable in the short/long term. According to price forecasts for (n+8 weeks) period, the dominant strategy among neural network is: Sell

WSO Watsco Inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Ba3
Balance SheetCaa2B1
Leverage RatiosCBa3
Cash FlowBaa2C
Rates of Return and ProfitabilityBaa2Baa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 83 out of 100 with 662 signals.

References

  1. S. Bhatnagar and K. Lakshmanan. An online actor-critic algorithm with function approximation for con- strained Markov decision processes. Journal of Optimization Theory and Applications, 153(3):688–708, 2012.
  2. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Can neural networks predict stock market?(ATVI Stock Forecast). AC Investment Research Journal, 101(3).
  3. Mnih A, Hinton GE. 2007. Three new graphical models for statistical language modelling. In International Conference on Machine Learning, pp. 641–48. La Jolla, CA: Int. Mach. Learn. Soc.
  4. Van der Vaart AW. 2000. Asymptotic Statistics. Cambridge, UK: Cambridge Univ. Press
  5. Jacobs B, Donkers B, Fok D. 2014. Product Recommendations Based on Latent Purchase Motivations. Rotterdam, Neth.: ERIM
  6. Bamler R, Mandt S. 2017. Dynamic word embeddings via skip-gram filtering. In Proceedings of the 34th Inter- national Conference on Machine Learning, pp. 380–89. La Jolla, CA: Int. Mach. Learn. Soc.
  7. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Trading Signals (WTS Stock Forecast). AC Investment Research Journal, 101(3).
Frequently Asked QuestionsQ: What is the prediction methodology for WSO stock?
A: WSO stock prediction methodology: We evaluate the prediction models Modular Neural Network (Social Media Sentiment Analysis) and Lasso Regression
Q: Is WSO stock a buy or sell?
A: The dominant strategy among neural network is to Sell WSO Stock.
Q: Is Watsco Inc. Common Stock stock a good investment?
A: The consensus rating for Watsco Inc. Common Stock is Sell and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of WSO stock?
A: The consensus rating for WSO is Sell.
Q: What is the prediction period for WSO stock?
A: The prediction period for WSO is (n+8 weeks)

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