Staff Reporter
In a fragmented market ripe for growth, one company stands out, having made its shareholders incredibly wealthy. It’s never too late to invest in a standout stock, especially one endorsed by billionaire investor Warren Buffett.
His holding company, Berkshire Hathaway, recently acquired a stake in Pool Corp. (POOL), the world’s largest distributor of swimming pool equipment and supplies. This stock has delivered an astounding return of over 42,000% since its inception.
So, what drives Pool Corp.’s success, and is now the right time to invest? Here’s what you need to know.
Understanding Pool Corp.’s Success
Pool Corp. serves over 125,000 wholesale customers primarily in the U.S., while also operating in Canada, Mexico, Europe, and Australia. Owning a swimming pool is a significant investment, often exceeding $100,000 for in-ground installations. Pool Corp. earns revenue from three key areas of pool ownership:
- New construction and installation: 15% of 2024 revenue
- Upgrades and remodels: 20% of 2024 revenue
- Supplies and maintenance: 65% of 2024 revenue
A vital part of Pool Corp.’s strategy is its ability to generate recurring revenue from each new pool, which has grown from 60% of sales in 2014 to 65% in 2024.
With over 11 million bodies of water in the U.S., including 5.4 million in-ground pools, Pool Corp. maintains a competitive edge by acquiring smaller competitors, increasing its market share. As the business expands, so does its cash flow, allowing the company to invest in stock buybacks and dividends, further enhancing shareholder returns.
However, since swimming pools are typically luxury purchases, new installations can be influenced by economic conditions. Consumer sentiment has declined recently, and rising interest rates may slow home construction—key factors for new pool installations.
Though Pool Corp. reported a year-over-year decline in sales and profits during the first quarter of 2025, management reassured investors by affirming its full-year earnings guidance established in Q4 2024. This optimism is encouraging as the peak swimming season approaches in Q2 and Q3, though future adjustments may depend on economic shifts.
In summary, while Pool Corp. has shown remarkable performance over the years, potential investors should weigh the current economic landscape before making a decision.
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