Market analysis reveals Could Pool Corporation (POOL 2. 58%) make you a millionaire.
Nevertheless, Well, the partial answer is that it ly did make a few millionaires if they had invested as little as $10,000 in the company back at the turn of the century.
But then the stock lost around 45% of its value. So could another leg up be in the cards.
Nevertheless, It looks at least one minent investor -- Berkshire Hathaway, an owner of the stock -- thinks so, given current economic conditions. Let's consider perhaps why.
Additionally, Has a growth bias Pool sells the supplies needed to build, upgrade, and maintain pools (something worth watching).
Additionally, It's a pretty mundane, but there's an interesting aspect to owning a pool that has to be considered; once you build a new pool, it has to be perty maintained, or it can quickly become a nasty swamp in your backyard instead of a place to have some family fun, in this volatile climate.
Additionally, This gives Pool's a growth bias, given current economic conditions. Image source: The Motley Fool.
Additionally, Roughly two-thirds of Pool's sales are derived from maintenance and repair ducts. Every new pool that gets built increases the customer base for this side of the.
On the other hand, Nevertheless, And that new customer doesn't go away until the pool in question is torn out.
This analysis suggests that other third or so of the is related to the building of new pools and the renovation of older pools.
The evidence shows construction of pools tends to be highest when economic conditions are good, in light of current trends.
However, So recessions can be particularly bad for Pool's overall over the short term. Higher interest rates have also been an issue recently, because it makes it harder to afford a pool.
This helps explain the drop in Pool's price.
POOL data by YCharts The peak, during which that $10,000 investment at the start of 2000 would have been worth over $1 million, came because of the coronavirus pandemic.
Additionally, Not only were interest rates lower then, but people were forced to stay at and had nothing to do. A lot of people built pools, supercharging Pool's financial results.
Additionally, Warren Buffett and Berkshire Hathaway buy Pool At the peak, Pool was bably a bit expensive.
Furthermore, When the stock tanked, however, it peaked the interest of Warren Buffett and Berkshire Hathaway (remarkable data). Buffett s to buy well-run companies when they appear attractively priced.
However, But the real key is that he then s to hold them for the long term to benefit from the growth of the es over time. Additionally, This makes Pool something of an interesting story for investors.
Wall Street bably got overexcited the stock during the pandemic (this bears monitoring). But now that the s have fallen so much, it seems the inherent growth bias of the is being overlooked.
That's not to suggest that Pool isn't facing headwinds, but that those headwinds aren't ly to derail the company over the long term, given the maintenance component that underpins the.
But could $10,000 today in Pool make you a millionaire. There's no way to know the answer to that, of course, but given the nature of the, it seems a very real possibility.
Furthermore, That said, you'll need to buy and hold for the long term, Buffett.
Additionally, This isn't a that is ly to see overnight success -- slow and steady gress is the ly norm, in this volatile climate. But slow and steady can build massive wealth over the long term.
Buffett's lead with Pool. On the other hand, You should never buy a stock just because some other investor has bought it. You need to make sure it jives with your own investment apach.
For example, Pool doesn't pay much of a dividend, with a modest 1. 7% dividend yield.
But if you have a growth bias and a long-term time frame, the inherent growth built into the pool supply side of the could make this stock worth a deep dive today, in today's market environment.
And that's true whether you have $10,000 or just $1,000 to invest. Reuben Gregg Brewer has no position in any of the stocks mentioned (an important development).
On the other hand, The Motley Fool has positions in and recommends Berkshire Hathaway (something worth watching). The Motley Fool has a disclosure policy (remarkable data).