Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, swimming-pool-equipment supplier Pool Corporation (Nasdaq: POOL) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Pool's business and see what CAPS investors are saying about the stock right now.
Pool Corporation facts
| Headquarters (founded) | Covington, La. (1993) |
| Market Cap | $820.3 million |
| Industry | Leisure products |
| TTM Revenue | $1.72 billion |
| Management | CEO Manuel Perez de la Mesa (since 2001) |
| 4-Month Return | 43% |
| Compound Annual Revenue and Net Income Growth (over last three years) | 1.7% and (13.3%) |
| Competitors | Home Depot (NYSE: HD) |
| CAPS members bearish on POOL also bearish on | Lennar (NYSE: LEN) |
| CAPS members bullish on POOL also bullish on | Apple (Nasdaq: AAPL) |
Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 29 of the 83 All-Star members who have rated Pool Corporaiton -- some 35% -- believe the stock will underperform the S&P 500 going forward. These bears include All-Stars mrindependent and threepaweddog, both of whom are ranked in the top 7% of our community.
Just last month, mrindependent warned that Pool owners would likely have their heads underwater:
I expect the economy to continue to be tough and discretionary spending will be low. A big share of this company's revenues come from new pools, which are the ultimate discretionary item. Recurring revenues from pool supplies will likely enable this company to avert total disaster but year over year sales are down 20% and profits are down accordingly.
In an earlier pitch, threepaweddog also thinks this Pool is headed for a dip:
This one easily gets a red thumb. Three of their four largest markets are in the bubble states of California, Florida, and Arizona. Most new pool construction (where Pool derives 20% of their sales) is financed off of home equity. In the bubble states, even if customers could qualify for a loan, there is no equity left in real estate purchased during the past few years. … If you believe the real estate market will only get worse, then new pool construction will drop further.... If you like their management and their business, wait for the housing market to turn around in the key markets.
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