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]

Core Viewpoint - Shares of Pool Corp are currently trading at a lower price than what Berkshire Hathaway paid, presenting a potential investment opportunity, but caution is advised due to market conditions and company performance [1][2]. Company Overview - Pool Corp is the world's largest wholesaler of pools, pool equipment, parts, and supplies, with a significant portion of its revenue derived from servicing and maintaining existing pools [8][10]. - Approximately 64% of Pool's revenue comes from servicing existing pools, while only 14% is from new pool installations [10]. Investment Activity - Berkshire Hathaway began acquiring shares of Pool Corp in Q3 2024, initially purchasing 404,057 shares valued at $152.2 million, and increased its stake to over $1 billion by Q2 2025 [3][4]. - The total stake held by Berkshire in Pool Corp reached 9.2% of the company [4]. Share Price Analysis - The lowest price Berkshire could have paid for Pool shares was $296.17 in Q3 2024, with prices fluctuating in subsequent quarters, reaching a low of $285 in Q2 2025 [5][6]. - Current trading price of Pool shares is $267.06, which is lower than any price Berkshire paid [7]. Market Conditions - Pool Corp's stock price surged during the pandemic due to increased demand for home leisure options, but has since declined due to rising mortgage rates and falling home construction starts [8][9]. - The market for new pool installations remains soft, which is expected to continue until the housing market improves [10]. Valuation and Investment Considerations - Pool Corp is currently trading at a below-average valuation of 26 times trailing earnings and offers a dividend yield of 1.73% [11]. - Long-term investors may find Pool Corp appealing despite near-term volatility, but it may be prudent to wait for signs of recovery in the housing market before investing [11].