Core Insights - Berkshire Hathaway has recently filed its 13F report, revealing its stock positions and recent buying and selling activities [1][2] Constellation Brands - Berkshire increased its position in Constellation Brands by 114% in the last quarter, now owning over 12 million shares, though this represents less than 1% of its total portfolio [4][5] - The company has strong consumer brands like Corona and Modelo, providing a competitive advantage, and has shown steady revenue growth with an operating income of $3.4 billion on $10.2 billion in revenue, resulting in a 33% margin [5] - The stock hit a 52-week low in mid-February, prompting Berkshire to increase its holdings as a bargain investment [6] - Constellation Brands pays a dividend of 2.2%, which is higher than the S&P 500 average of 1.3% [8] Pool Corp - Berkshire's position in Pool Corp increased by 145%, totaling around 1.5 million shares, but this only constitutes 0.2% of its overall portfolio [9] - Pool Corp is a leading wholesale distributor of swimming pool equipment and has a strong global presence [10] - The company's sales have declined from $6.2 billion in 2022 to $5.3 billion in the most recent year, with an operating income of $617 million, representing a 12% margin [11] - Similar to Constellation, Pool Corp's stock has also been falling, which may have influenced Berkshire's decision to add to its holdings [12]

Core Viewpoint - Pool Corp. is a leading player in a fragmented market, demonstrating significant long-term shareholder wealth creation, with a stock return exceeding 42,000% over its lifetime [2][3] Company Overview - Pool Corp. serves over 125,000 wholesale customers, primarily in the U.S., but also operates in Canada, Mexico, Europe, and Australia [3] - The company generates revenue from three main aspects of pool ownership: new construction and installation, upgrades and remodels, and supplies and maintenance [9] Revenue Streams - Recurring revenue from supplies and maintenance accounted for 65% of 2024 sales, an increase from 60% in 2014 [3] - New construction and installation contributed 15% of 2024 revenue, while upgrades and remodels made up 20% [9] Market Position - Pool Corp. has a competitive advantage as the leader in the fragmented pool industry, frequently acquiring smaller competitors to enhance market share [4] Financial Performance - The company generates increasing cash flow as it grows, with management allocating most cash flow to stock buybacks and dividends, enhancing earnings per share [5] - Despite a year-over-year decline in sales and profits in Q1 2025, management maintained its full-year earnings guidance, indicating confidence in the upcoming peak swimming pool season [7] Earnings Guidance - Management anticipates 2025 earnings between $11.10 and $11.60 per share, up from $11.07 in 2024, following a peak of $18.43 in 2022 [8] Valuation and Investment Potential - Pool Corp.'s current valuation appears attractive as the company returns to growth, with a proven track record of dividend increases over 14 consecutive years [10] - The stock yields 1.6%, the highest in over a decade, with a payout ratio below half of the 2025 earnings guidance, suggesting value rather than business risk [11]