Performance Summary - Parnassus Mid Cap Fund achieved a return of 1.17% in Q4 2025, outperforming the Russell Midcap Index which returned 0.16% [1] - Year-to-date, the Fund returned 12.85%, compared to the index's 10.60% [1] - The Fund's performance was bolstered by investments in the Information Technology sector and Utilities [1] Outlook - The Fund is optimistic about mid-cap stocks driving market growth in 2026, contingent on continued economic expansion beyond artificial intelligence [1] - In case of a market downturn, the Fund believes its portfolio of financially solid companies will provide downside protection [1] Pool Corporation Analysis - Pool Corporation (NASDAQ:POOL) is a leading distributor of swimming pool supplies with a market capitalization of $7.38 billion [2] - The stock closed at $200.49 on March 30, 2026, with a one-month return of -15.95% and a 52-week decline of 37.52% [2] - Parnassus Mid Cap Fund exited its position in Pool Corporation due to high valuation relative to growth potential amid sluggish demand in the pool market [3] Hedge Fund Interest - Pool Corporation was held by 45 hedge fund portfolios at the end of Q4 2025, an increase from 41 in the previous quarter [4] - Despite its potential, the Fund believes that certain AI stocks present greater upside and lower downside risk compared to Pool Corporation [4] - Pool Corporation's total sales in Q4 2025 were $982 million, just 1% below the previous year's level [4]

Core Thesis - Pool Corporation (POOL) is viewed positively due to its dominant market position, resilient core business, and potential for cyclical recovery in the housing market, which could lead to significant upside in stock valuation [1][4][6] Company Overview - Pool Corporation is the largest wholesale distributor of swimming pool supplies, holding approximately 40% of the U.S. market and operating 448 sales centers across North America, Europe, and Australia [2] - The company derives 62% of its revenue from recurring, non-discretionary maintenance of 10.7 million installed pools in the U.S., indicating strong customer relationships with around 125,000 wholesale customers [2] Financial Performance - Despite a 38% decline from 2024 highs, Pool Corporation maintains a conservative balance sheet with a Debt/EBITDA ratio of 1.4x and strong free cash flow ranging from $294 million to $659 million [3] - The company has a 15-year history of dividend increases, showcasing its financial stability even during economic downturns [3] Market Position and Future Outlook - Renovation and new pool construction contribute 24% and 14% of revenue, respectively, exposing the company to cyclical pressures from high interest rates and a slow housing market [3] - The company is expected to experience a cyclical inflection as U.S. housing activity and renovation spending recover in 2026-2027, with EPS projected to accelerate to 8-10% in 2027 [4] - Current valuation near 20x forward earnings presents an attractive entry point, with potential for a re-rating back toward historical multiples of 28-32x, implying a 40-60% upside [4][5] Competitive Advantages - Pool Corporation's scale, dense distribution network, and purchasing power create a narrow economic moat, further enhanced by digital initiatives that increase customer loyalty [4] - The business is insulated from AI disruption, although technology can improve operations and distribution [5] Risks and Challenges - The company faces risks including cyclical exposure, geographic concentration, weather dependence, and competition from Heritage Pool Supply [5]

Core Viewpoint - Pool Corporation's stock has declined 39% over the past year, currently trading at $213.66, while analysts maintain a target price of $266.09, indicating a potential upside of approximately 25% [1][2] Company Overview - Pool Corporation is the largest wholesale distributor of swimming pool supplies, equipment, and outdoor living products, operating 456 sales centers globally [1] - The company has a strong distribution network connecting manufacturers to pool builders, contractors, and retailers, which contributes to its market dominance [1] Recent Performance - The stock has fallen from a high of $351.23 to near its 52-week low of $210.67, reflecting significant market dislocation [1] - In Q4 2025, Pool Corporation reported adjusted diluted EPS of $0.84, missing the estimate of $0.98 by nearly 14%, and revenue of $982.21 million, which was below the consensus of $999.16 million, marking a 0.5% year-over-year decline [1] - Operating expenses increased by 6% to $243.74 million, leading to a 14% drop in operating income year-over-year to $52.01 million [1] Analyst Sentiment - Among 14 analysts covering Pool Corporation, 5 rate it a Buy, 8 rate it a Hold, and 1 rates it a Strong Sell, indicating a cautiously constructive outlook [1] - The average price target of $266.09 suggests that most analysts believe the current price reflects an overshoot to the downside [1] Key Financial Metrics - Current stock price: $213.66 - 52-week high/low: $368.65 / $210.67 - Year-to-date performance: down 6.6% - 1-year performance: down 39.17% - Dividend yield: 2.27% - Trailing P/E ratio: approximately 20x [1][2] Market Conditions - Consumer sentiment is at 56.4, indicating recessionary conditions, which may impact discretionary spending on pool upgrades [1] - Analysts are closely monitoring housing starts data, which showed a recovery to 1.40 million units annualized in December 2025, as new pool construction typically lags behind housing activity [1] Sector Comparison - Leslie's, a competitor in the pool industry, has seen a drastic decline of 95% in its stock price, contrasting with Pool Corporation's more stable position despite its recent challenges [2] - Pool Corporation's maintenance business provides a non-discretionary revenue base, which remains stable even during economic downturns [2]

Group 1 - The London Company Mid Cap Strategy reported a portfolio return of 3.2% in Q4 2025, outperforming the Russell Midcap Index which increased by 0.2% [1] - The Russell 3000 Index rose by 2.4% in Q4 2025, marking the third consecutive quarter of higher returns for US equities [1] - Stock selection and sector exposure were significant contributors to the portfolio's relative performance during the quarter [1] Group 2 - Pool Corporation (NASDAQ:POOL) experienced a one-month return of -15.95% and a 52-week decline of 37.52%, with a market capitalization of $8.108 billion [2] - In Q4 2025, Pool Corporation's total sales reached $982 million, which is 1% lower than the previous year's level [5] - The company is facing cautious investor sentiment due to concerns around discretionary home improvement spending, despite stabilizing new pool construction and growth in building materials [3]

Core Insights - Pool Corporation, based in Covington, Louisiana, is the leading independent distributor of swimming pool supplies and related leisure products, with a market cap of $9.5 billion and operations in nearly 450 locations serving over 125,000 customers globally [1] Financial Performance - Pool stock has declined by 35.9% over the past 52 weeks and 4.5% year-to-date, significantly underperforming the S&P 500 Index, which gained 11.7% over the same period [1] - The company reported a 1% year-over-year drop in sales for Q4 2025, totaling $982.2 million, which missed estimates, while EPS fell from $0.97 to $0.84, also below forecasts [5] - For the full fiscal year 2026, analysts expect an EPS of $11, reflecting a 2.5% year-over-year increase, although the company has a mixed earnings surprise history [6] Analyst Ratings - The consensus rating for Pool stock is "Moderate Buy," with five analysts recommending "Strong Buy," nine "Holds," and one "Moderate Sell" [6] - Wells Fargo analyst Sam Reid raised the price target for Pool Corp. to $275 from $250 while maintaining an "Equal-Weight" rating, indicating a modestly improved valuation outlook [7]

Group 1: Company Overview - Pool Corporation (NASDAQ:POOL) is the largest distributor of swimming pool supplies, equipment, and related outdoor products in the United States [3] - The company has a market capitalization of $8.13 billion [2] Group 2: Financial Performance - As of February 19, 2026, Pool Corporation's stock closed at $218.36 per share, with a one-month return of -17.61% and a 52-week decline of 36.52% [2] - The company's maintenance business is performing well, but revenue is pressured by deflation in its tricolor chemical business [3] Group 3: Market Conditions - Demand for Pool Corporation's products is under pressure due to a slower housing market and reduced discretionary spending [3] - Decreased new pool construction and renovation activities are negatively impacting volumes [3] Group 4: Investment Sentiment - Pool Corporation is not among the 30 most popular stocks among hedge funds, with 41 hedge fund portfolios holding the stock at the end of Q3 2025, down from 44 in the previous quarter [4] - While the potential for Pool Corporation as an investment is acknowledged, certain AI stocks are considered to offer greater upside potential and less downside risk [4]

Core Viewpoint - The market anticipates Pool Corp. (POOL) will report a year-over-year increase in earnings driven by higher revenues for the quarter ending December 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected on February 19, with a consensus estimate of $0.99 per share, reflecting a year-over-year increase of +2.1%. Revenues are projected to be $998.27 million, up 1.1% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 0.07% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Most Accurate Estimate for Pool Corp. is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.01%, suggesting a bullish outlook from analysts [12]. Historical Performance - In the last reported quarter, Pool Corp. exceeded the expected earnings of $3.38 per share by delivering $3.39, resulting in a surprise of +0.30%. Over the last four quarters, the company has beaten consensus EPS estimates three times [13][14]. Investment Considerations - While a potential earnings beat is a positive indicator, other factors may influence stock performance, making it essential to consider the broader context [15][17].

Core Insights - Pool Corp. is well-positioned to continue its earnings-beat streak in upcoming reports, having surpassed earnings estimates in the last two quarters by an average of 0.64% [1] Earnings Performance - For the most recent quarter, Pool Corp. reported earnings of $3.39 per share, exceeding the expected $3.38 per share, resulting in a surprise of 0.30% [2] - In the previous quarter, the company reported $5.17 per share against an expectation of $5.12 per share, achieving a surprise of 0.98% [2] Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Pool Corp., with a positive Earnings ESP of +1.01%, indicating bullish sentiment among analysts regarding the company's earnings prospects [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that such combinations lead to positive surprises nearly 70% of the time [6][8] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may be more accurate than earlier predictions [7] - A negative Earnings ESP reduces predictive power but does not necessarily indicate an earnings miss [9] Importance of Earnings ESP - Companies often beat consensus EPS estimates, but this is not the only factor influencing stock price movements; thus, checking the Earnings ESP before quarterly releases is crucial for investment decisions [10]

Core Thesis - Pool Corporation is viewed as a compelling long-term investment despite recent slowdowns linked to the housing market, reflecting the cyclical nature of its growth [2] Financial Performance - The company has shown resilience with revenue increasing for the first time in nine quarters, posting two consecutive quarters of positive growth [3] - Normalizing for COVID-related surges, Pool Corporation continues to exhibit higher revenue and improved profit margins compared to pre-pandemic levels, indicating a return to sustainable growth [3] Balance Sheet and Valuation - The balance sheet is strong, with long-term debt remaining below 3x free cash flow, positioning the company well for market rebounds [4] - Pool Corporation is trading near a 10% capitalization rate, not yet reflecting its historical ability to deliver sustained growth [4] Market Outlook - Potential housing policy reforms aimed at improving affordability could provide additional support for the business, although the exact impact is uncertain [4] - The combination of resilient operations, a strong balance sheet, and potential macroeconomic support underscores the company's attractiveness for patient investors [5] Investment Perspective - While short-term performance has been muted, the long-term trajectory remains intact, suggesting that investors maintaining their positions are likely to be rewarded as market conditions improve [5] - The current environment represents an opportunity for investors to remain invested in a well-managed, cash-generative company with significant upside potential [5] Recent Developments - As of May 2025, Pool Corporation's stock price has depreciated by approximately 12.78% due to continued revenue normalization and regional headwinds [6] - The ongoing complexity of market recovery and gradual return to historical growth trends is emphasized, reflecting a cautious outlook [6]

Core Viewpoint - Pool Corporation (POOL), a leading distributor of swimming pool supplies, is expected to announce its fiscal fourth-quarter earnings for 2025 soon, with analysts projecting a slight increase in profit per share compared to the previous year [1][2]. Financial Performance - Analysts anticipate POOL will report a profit of $0.99 per share on a diluted basis for the upcoming quarter, reflecting a 2.1% increase from $0.97 per share in the same quarter last year [2]. - For the full fiscal year, analysts expect POOL's EPS to be $10.87, which is a decrease of 1.8% from $11.07 in fiscal 2024, but forecast a rise of 6.5% year over year to $11.58 in fiscal 2026 [3]. Stock Performance - Over the past 52 weeks, POOL stock has underperformed, with a decline of 23.3%, compared to a 16.9% gain in the S&P 500 Index and a 21.9% rise in the Industrial Select Sector SPDR Fund [4]. - Following the Q3 results announcement on October 23, 2025, POOL shares closed marginally up, with an adjusted EPS of $3.39 exceeding Wall Street expectations of $3.38, and revenue meeting forecasts at $1.5 billion [5]. Analyst Ratings - The consensus opinion on POOL stock is moderately bullish, with a "Moderate Buy" rating. Among 15 analysts, five recommend a "Strong Buy," nine suggest a "Hold," and one advises a "Moderate Sell" [6]. - The average analyst price target for POOL is $311.09, indicating a potential upside of 16.1% from current levels [6].