Should You Buy Pool Corporation (NASDAQ:POOL)?

Pool Corporation (NASDAQ:POOL) investors should pay attention to an increase in hedge fund sentiment of late.

To the average investor, there are tons of metrics market participants can use to analyze stocks. A duo of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outclass the market by a very impressive margin (see just how much).


Just as beneficial, bullish insider trading activity is a second way to break down the investments you’re interested in. As the old adage goes: there are a variety of incentives for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).

With these “truths” under our belt, let’s take a glance at the key action regarding Pool Corporation (NASDAQ:POOL).

How are hedge funds trading Pool Corporation (NASDAQ:POOL)?

In preparation for this year, a total of 14 of the hedge funds we track were long in this stock, a change of 56% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Pool Corporation (NASDAQ:POOL). Royce & Associates has a $88 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Ken Fisher of Fisher Asset Management, with a $29 million position; 0% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

As aggregate interest increased, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the most valuable position in Pool Corporation (NASDAQ:POOL). Millennium Management had 5 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $3 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Bruce Kovner’s Caxton Associates LP, and Steven Cohen’s SAC Capital Advisors.

What do corporate executives and insiders think about Pool Corporation (NASDAQ:POOL)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Pool Corporation (NASDAQ:POOL) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Pool Corporation (NASDAQ:POOL). These stocks are Callaway Golf Co (NYSE:ELY), Black Diamond Inc (NASDAQ:BDE), Johnson Outdoors Inc. (NASDAQ:JOUT), Nautilus, Inc. (NYSE:NLS), and Escalade, Inc. (NASDAQ:ESCA). This group of stocks belong to the sporting goods industry and their market caps are closest to POOL’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Callaway Golf Co (NYSE:ELY) 9 3 0
Black Diamond Inc (NASDAQ:BDE) 5 0 0
Johnson Outdoors Inc. (NASDAQ:JOUT) 4 0 2
Nautilus, Inc. (NYSE:NLS) 4 0 0
Escalade, Inc. (NASDAQ:ESCA) 2 2 1

With the returns demonstrated by our studies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Pool Corporation (NASDAQ:POOL) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.