How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Pool Corp. (POOL) ten years ago? It may not have been easy to hold on to POOL for all that time, but if you did, how much would your investment be worth today?
Pool Corp.'s Business In-Depth
With that in mind, let's take a look at Pool Corp.'s main business drivers.
Based in Covington, LA, Pool Corp. is the world's largest wholesale distributor of swimming pool supplies, equipment and related products. In addition, the company is a leading regional wholesale distributor of irrigation and landscape products. The company was incorporated in the State of Delaware in 1993 and grew from a regional distributor to a multi-national, multi-network distribution company.
The company reports operations under two segments — the Base Business segment (95.1% of total 2021 revenues) and the Excluded segment i.e., sale centers excluded from Base Business (4.9%). As of Dec 31, 2021, Pool Corp operated 410 sales centers in North America, Europe and Australia, through which it distributes more than 200,000 national brand and private-label products to nearly 120,000 wholesale customers.
The company serves five types of customers: a) swimming pool remodelers and builders, b) retail swimming pool stores, c) swimming pool repair and service businesses, d) landscape construction and maintenance contractors, and e) golf courses. Most of its customers include small, family-owned businesses.
The company offers customers products in the following categories: 1) Pool maintenance — including a wide array of chemicals, supplies and repair parts, 2) Pool construction and renovation — such as pool pumps, filters, heaters and cleaners, pool surfacing materials, pool tile, coping, deck equipment, pool control systems, lighting and above-ground pool kits, 3) Irrigation and landscape — including a complete line of commercial and residential irrigation products, landscape maintenance and equipment products and parts, 4) Outdoor living — such as outdoor lighting, grills, outdoor kitchen components and hardscape products.
Pool operates through three distribution networks: the SCP Distributors (SCP) network, the Superior Pool Products (Superior) network and the Horizon network. Swimming pool supplies, equipment and related leisure products are distributed through the SCP and Superior networks, while irrigation and landscape products are distributed through Horizon. The SCP and Superior channels are referred to as the Blue side, while Horizon is referred to as the Green side.
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Pool Corp. ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in March 2012 would be worth $13,024.95, or a 1,202.49% gain, as of March 18, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 214.18% and gold's return of 12.15% over the same time frame.
Analysts are anticipating more upside for POOL.
Shares of Pool Corp have outperformed the industry in the past year. The company reported solid fourth-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate as well as increasing year over year. The company is benefitting from the solid performance of base business, large market presence and strategic expansions through acquisitions. Also, it is benefitting from solid demand across heaters, automation products and variable speed pumps. Going forward, the company remains optimistic on the back of products (such as automation and the connected pool), the continuation of the de-urbanization trends along with the strengthening of the southern migration. However, coronavirus-related woes persist. This along with inflationary pressures concerning labor, compensation, healthcare, freight and rent are a concern.
The stock is up 6.55% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 4 higher, for fiscal 2022. The consensus estimate has moved up as well.
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