POOL

Pool Corporation

Consumer, Industrial/Transportation


Presented:03/02/2023
Price:$352.80
Cap:$13.78B
Current Price:$364.68
Cap:$13.95B

Presented

Date03/02/2023
Price$352.80
Market Cap$13.78B
Ent Value$13.46B
P/E Ratio18.86x
Book Value$31.62
Div Yield1.08%
Shares O/S39.05M
Ave Daily Vol456,292
Short Int12.48%

Current

Price$364.68
Market Cap$13.95B
Pool Corp. engages in the wholesale distribution of swimming pool supplies, equipment, and related leisure products. It also offers non-discretionary pool maintenance products such as chemicals and replacement parts, discretionary products like packaged pool kits, whole goods, irrigation, and landscape products, including a complete line of commercial and residential irrigation products and parts, power equipment for the professional landscape market, specialty products such as outdoor lighting, grills, and outdoor kitchen components, and golf irrigation and water management products. The company was founded in 1993 and is headquartered in Covington, LA.

Publicly traded companies mentioned herein: Fluidra SA (FDR SM), Hayward Holdings Inc (HAYW), Pool Corp (POOL)

Highlights

The presenter is short shares of Pool Corp (POOL), which is the largest distributor of pool supplies in the US. Roughly 2/3 of the revenue mix is maintenance/repair (i.e., chlorine tablets) with the other ~1/3 split evenly between new pool construction (largely tied to new home construction) and remodels (upgrades to existing pools). He considers POOL a good company but notes that it has benefited from extraordinary tailwinds over the last few years that are just starting to normalize. Despite this unwinding, the stock is up from $300 per share at the beginning of the year to the current $350. Modeling normalized EPS of $11 – $12 and a 25x valuation in line with its historical range leads to his fair value of $275 – $300. 

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Idea Discussion

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