Latest news with #PoolCorp.
Yahoo
24-06-2025
- Business
- Yahoo
If I Could Buy Only 1 Warren Buffett Stock Over the Next 10 Years, Pool Corp. Would Be It. Here's the Key Reason.
Pool Corp. is the dominant player in its industry and continues to consolidate it. It's precisely the kind of boring investment that tends to generate stellar returns while no one is looking. 10 stocks we like better than Pool › Warren Buffett is not known for buying the most exciting businesses out there, but he is known for making some of the best investments. It's a thought to bear in mind when considering investing in Pool Corp. (NASDAQ: POOL), one of Berkshire Hathaway's holdings. Here's why. The case for buying Pool Corp. is simple. The company holds a dominant market share in a highly fragmented yet growing market. Remember that, even if new pool construction growth is slowing, the installed base of pools is still growing, creating opportunities for Pool Corp. In fact, almost two-thirds of its sales come through the maintenance and repair of existing swimming pools, with items such as chemicals, equipment, parts, and supplies used to maintain pumps, heaters, and filters. These factors come together to create a business with relatively high profit margins (for a distributor) and consistently high return on invested capital (ROIC). It implies that every new sales center it invests in, or smaller distributor it acquires to build scale, tends to generate a good return. Observant readers will note that Pool's margins and ROIC declined in 2022, but this is due to a natural correction from the artificial boom in stay-at-home spending created by the pandemic lockdowns. About 15% of its sales in 2024 came from new swimming pool construction, and the slowdown in this area has impacted Pool Corp.'s sales growth. Still, as noted above, the installed base is growing, and so should Pool Corp.'s revenue from maintenance and repair. As such, when the new pool construction market inevitably bottoms, Pool Corp. should get back on its long-term growth path. Before you buy stock in Pool, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Pool wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,692!* Now, it's worth noting Stock Advisor's total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy. If I Could Buy Only 1 Warren Buffett Stock Over the Next 10 Years, Pool Corp. Would Be It. Here's the Key Reason. was originally published by The Motley Fool
Yahoo
20-05-2025
- Business
- Yahoo
Made in the USA: Warren Buffett Sells Out of 1 International Stock and Doubles His Stake in 2 U.S. Companies
Berkshire Hathaway has been a net seller of stocks for 10 straight quarters, and it hasn't bought back its own shares in three quarters. It added to seven positions in the first quarter, including more than doubling its stake in Pool Corp. and Constellation Brands. It reduced its positions in six companies and sold out of two. 10 stocks we like better than Constellation Brands › Investors eagerly anticipate the Berkshire Hathaway quarterly 13F filings, which detail the company's current equity holdings. It provides investing inspiration for individual investors, but more than that, it's a window into what Chief Executives Officer Warren Buffett might be thinking about current market conditions. One obvious takeaway from recent filings is that this is not a buyer's market. Buffett has been a net seller of stocks for 10 quarters now, and it's been three quarters since he bought back shares of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), which is usually his favorite stock to buy. The company made the following changes to its equity portfolio in the 2025 first quarter: Reduced its positions in Bank of America, Davita, Capital One Financial, T-Mobile, Charter Communications, and Liberty Media Formula One Series C. Sold all shares of Citibank and Nu Holdings (NYSE: NU). Added to its positions in Pool Corp. (NASDAQ: POOL), Domino's Pizza, Occidental Petroleum, Verisign, Sirius XM, Constellation Brands (NYSE: STZ), and Heico. There's also a "secret" stock that the company requested not to disclose at this time. I want to focus on Berkshire's additions to Pool Corp. and Constellation Brands because it more than doubled its stake in these two companies. It also sold out of Nu, which unlike Citibank, is a top growth stock. Let's see what Buffett might be thinking and if his moves make sense for you. Buffett loves the U.S. and he has voiced incredible faith in its unfolding story. He loves investing in American companies, especially those that drive economic growth. He mentions this over and over and made several references to it at the Berkshire Hathaway annual meeting in early May. "If you live in the United States," he said, "you've already won the game to a great degree, and then just keep making the most of it." So it's no surprise that he's piling money into companies that could be great American growth drivers. Constellation Brands owns several alcoholic beverage brands like Robert Mondavi wine and Corona beer, and these are leading names that make products that will always draw consumers. The company has been struggling lately, but that's often how Buffett finds the best deals. Everyone else is turning away, but Buffett can see the bigger picture. Sales were up 1% year over year in the fiscal 2025 fourth quarter (ended Feb. 28), but it reported operating and net losses. Constellation Brands stock is down 25% during the past year, and it trades at a forward one-year price-to-earnings (P/E) ratio of 15. That's not super cheap for a stock that's struggling, unless there's ample reason to envision a comeback. Berkshire Hathaway more than doubled its position in Constellation Brands in the 2025 first quarter. What do Buffett and his team see? The company did provide a long-term outlook for 2026 through 2028, and it's slightly improved from current trends. In its favor is strong cash flow, and it pays a dividend that yields 2.1% right now. At the current price, Buffett and his team might think it's too cheap to ignore, considering its robust brand and long-term opportunities. This isn't the type of stock that will whet most investors' appetites. Don't forget, Buffett and his investing managers are running a multibillion-dollar company, and they have uses for the dividend throughout their enterprise. What about Pool Corp., which as the name indicates makes products for swimming pools? It's also been struggling lately. Sales fell 4% from last year in the 2025 first quarter, and operating income and margin were both lower as well. But it also has a role in driving U.S. economic growth. It's the largest U.S. company of its type, and it attracts business from an affluent clientele. There's every reason to imagine that despite the current gloomy market conditions, it has a long, strong future ahead. This chart is a good visual representation of what Buffett likes in a company's capital allocation. Most of Pool's spending goes to share buybacks and paying dividends, and just a small portion is needed to keep the company running. Pool isn't as cheap, trading at 29 times forward one-year earnings, but it's below recent averages. Berkshire Hathaway increased its stake by 145% in the first quarter, and this kind of stock might be more interesting to value investors. Buffett has said that most of his company's money would always be in U.S. stocks. He invested in Nu, or rather, more likely one of his investing managers invested in Nu, before it went public in 2021. It's not a typical Buffett stock because it's a young tech company, but it's also a bank, which is something Buffett likes. Brazil-based Nu operates an all-digital bank in Latin America, and its markets have been experiencing economic volatility, which might be why Buffett has been selling it. He's clearly leaning into more established value stocks. Nu is a growth stock demonstrating strong performance with a long growth runway. It looks like a compelling buy at a forward one-year P/E ratio of 23, so long as you have some appetite for risk and a long time horizon. But Nu wasn't Buffett's only international stock. He owns Chinese electric-vehicle manufacturer BYD, and he recently increased his stake in five Japanese companies. So this isn't a U.S. vs. international play or, at least, not entirely. Underpinning his whole investment philosophy is a focus on U.S. companies, and tariffs or not, that's always what's going to guide how he invests. Before you buy stock in Constellation Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Constellation Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in Nu Holdings. The Motley Fool has positions in and recommends Bank of America, Berkshire Hathaway, Domino's Pizza, and VeriSign. The Motley Fool recommends BYD Company, Constellation Brands, Heico, Nu Holdings, Occidental Petroleum, and T-Mobile US. The Motley Fool has a disclosure policy. Made in the USA: Warren Buffett Sells Out of 1 International Stock and Doubles His Stake in 2 U.S. Companies was originally published by The Motley Fool
