What to Know Before Buying Pool Corp. Stock

Core Insights - Pool Corp. is the world's largest wholesale distributor of swimming pool equipment, parts, and supplies, but its revenue sources are diverse and influenced by market conditions [1] Revenue Sources - Approximately one-third of Pool's revenue is derived from new pool installations, which have seen a decline post-pandemic due to high interest rates affecting the housing market [2] - The remaining two-thirds of revenue comes from maintenance and repair of existing pools, which is recurring and provides stability for the company's dividend, currently yielding about 2.1% [3] Stock Valuation - Pool's current stock price is around $239.98, significantly lower than its five-year average price of $372, and even below the price paid by Berkshire Hathaway, which ranged from $285 to $390.03 per share [4][5] - Investors purchasing shares now are receiving a discount of 18.2% to 40.2% compared to what Buffett paid [6] Market Outlook - The decline in Pool's stock price is largely attributed to the outlook for the real estate market, which affects new pool installations [7] - While maintenance and repair revenue is less dependent on real estate, the company faces limitations in price increases due to its role as a distributor [8] - Future growth in maintenance and repair revenue is contingent on an increase in the number of pools, which is tied to a recovering housing market [9]