Pool Corporation (POOL): This Swimming Pool Leader Is a Good Play in the Housing Recovery

Page 1 of 2

Since the bottom of 2009, Pool Corporation (NASDAQ:POOL) has been on a rising trend, from nearly $11.60 per share in March 2009 to more than $53.50 per share. This company is in the portfolios of many famous investors including Joel Greenblatt and Jim Simons. Sandy Villere of Villere Balanced Fund was also bullish about this company, mentioning that it had a dominating position in the industry with its pricing power. Let’s take a closer look to determine whether or not we should buy Pool Corporation (NASDAQ:POOL) at its current trading price.

The leader in the pool niche market

Pool Corporation (NASDAQ:POOL) is considered the biggest swimming Pool Corporation (NASDAQ:POOL) supplies and equipment wholesale distributor, operating 312 sales centers in North America and Europe. The company has three of the biggest suppliers including Pentair Water Pool and Spa (18% of the total purchases), Hayward Pool Products (11%), and Zodiac Pool Systems (8%). In the past four years, Pool has consistently generated growing sales and net income. Its top line increased from $1.54 billion in 2009 to more than $1.95 billion in 2012, while net income rose from $19.2 million, or $0.39 EPS, to nearly $82 million, or $1.71 EPS, during the same period.

Currently, there are around 80 million U.S. homes that could have space for a swimming pool, but only around 9.6 million homes have pools. Thus, according to the company, there was a huge potential growth for swimming Pool Corporation (NASDAQ:POOL) equipment supplies and replacement. Its sales growth in the past two years was mainly due to the market share gain, along with the industry growth of 3% to 4%.

Looking forward, Pool Corporation (NASDAQ:POOL) expected that the industry would experience a growth rate of 4%-7% before it reverts back to the range of 3%-5% in the long run. The improvement in the housing market will help Pool in the long run. In the period of 2013-2010, U.S. new pool construction was projected to have a consistent growth, supported by the overall housing recovery. Pool is trading at around $53 per share, with a total market cap of around $2.4 billion. The market values Pool at nearly 20.6 times its forward earnings.

Fast-growing Tile Shop

Pool is quite a good stock to play the ongoing recovery in the U.S. Another two stocks that would benefit substantially from this recovery trend are Tile Shop Hldgs, Inc. (NASDAQ:TTS) and The Home Depot, Inc. (NYSE:HD).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!