Should You Hold Pool Corporation (POOL) for the Long-Term?

·2 min read

Wedgewood Partners, an investment management company, released its “Focused SMID Cap Strategy” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 14.8% compared to a 7.4% return for the Russell 2500 Index. For the year 2022, the fund returned -19.0% compared to a -18.4% return for the benchmark. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Wedgewood Partners highlighted stocks like Pool Corporation (NASDAQ:POOL) in the fourth quarter 2022 investor letter. Headquartered in Covington, Louisiana, Pool Corporation (NASDAQ:POOL) is a swimming pool supplies, equipment, and related leisure products distributor. On March 6, 2023, Pool Corporation (NASDAQ:POOL) stock closed at $357.22 per share. One-month return of Pool Corporation (NASDAQ:POOL) was -8.83%, and its shares lost 18.26% of their value over the last 52 weeks. Pool Corporation (NASDAQ:POOL) has a market capitalization of $13.968 billion.

Wedgewood Partners made the following comment about Pool Corporation (NASDAQ:POOL) in its Q4 2022 investor letter:

"Pool Corporation (NASDAQ:POOL) detracted from performance despite reporting +10% organic sales growth on difficult year ago comparisons. We think the market is too focused on the effects of interest rates on Pool Corp's business, often with the stock trading up or down based on whatever the 10-year treasury seems to be doing at the moment. We'll note that, despite the most prolific and easy monetary policy in decades, especially during 2020 through 2021, new pool installations are only up 6% compared to 2019. The pool care industry has grown a multiple of that, so we think Pool Corp's future growth is less tied to new pool installation compared to what the market seems to think. Further, overall pool care demand does not vacillate anywhere near as much as long-term interest rates. The Company's inflation-fueled growth will be stickier compared to what the market currently assumes. The Company’s dominant positioning in the pool care industry is sustainable."

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Pool Corporation (NASDAQ:POOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Pool Corporation (NASDAQ:POOL) at the end of the fourth quarter which was 42 in the previous quarter.

We discussed Pool Corporation (NASDAQ:POOL) in another article and shared the list of best discuss dividend growth stocks with 10% yearly increases. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.