Disclosure: I own a small number of shares of POOL.

Pool Corp is a $17 billion market cap with an enterprise value around $18 billion. The stock trades on the Nasdaq with the symbol POOL . The business has been a compounding machine generating average annual compound returns of 29% per year since their IPO in 1995 and demonstrates strong ability to sustain for a long time to come.

Let’s dig into the business, the management, the risks, and the current valuation…

What They Do

Pool Corp is a large distributor in everything related to outdoor lifestyle products (you guessed it… pools!). They operate in North America, Europe and Australian markets. They also offer related products such as irrigation, outdoor lighting, hardscaping, landscaping, and related products.

90% of sales are from the US, with the remaining markets being in Canada, Australia and Europe. What’s even more interesting is the sales breakdown by type. The new construction only makes up 20% of the spend while 60% is in the maintenance/repair category which is very much a sticky and recurring source. The customer being heavily focused on the contractor end is also a good thing as they will be slightly less price conscious.

Their product offerings and channels to sell are wide and varied. They have a large runway to grow into a very fragmented market. Pool Corp. claims to be tackling a $28 billion dollar total addressable market.

Business Quality

With a growing distribution network and more scale advantages with their suppliers, Pool has been able to slowly and surely benefit from operating leverage over the years and there are no signs of this reversing in the near term.

Revenues have increased every year over the past decade at an average rate of 10%+.