$POOL is a large distributor in everything related to outdoor lifestyle products (you guessed it… pools!).

Growth has been fairly consistent and the demand during the work from home and southern migration in the US coupled with housing equity rising has meant some pull forward in the last two years.

Management has worked at reducing cyclical business impacts by building and prudently maintaining a strong balance sheet recently. Debt has remained low while EBITDA has grown.

The pool business will be loosely tied to the housing market. If there is a housing downturn, there will likely also be a dampening of the sales from Pool Corp.

Given that the business does not have an impenetrable moat from competition, I believe the value you are getting here is a combination of a good boring compounding business and a potentially great management team; not the other way around.

For more on the business and management quality, downside risks, and valuation check out my dive into $POOL (paywall - free trial available).