Pool Corp

POOL

Wholesale-Misc Durable Goods

Mkt Cap

$13.69B

PE

27.50

Debt

$979.2M

Cash

$67.97M

EV

$14.6B

FCF

$868.9M

Market Cap

$13.69B

P/E Ratio

27.50

Debt

$979.2M

Cash

$67.97M

EV

$14.6B

FCF

$868.9M

Charts data: {"Earnings":[{"time":"2014-12-30","value":110692000},{"time":"2015-12-30","value":128224000},{"time":"2016-12-30","value":148603000},{"time":"2017-12-30","value":191339000},{"time":"2018-12-30","value":234461000},{"time":"2019-12-30","value":261575000},{"time":"2020-12-30","value":366738000},{"time":"2021-12-30","value":646303000},{"time":"2022-12-30","value":744311000},{"time":"2023-12-30","value":520458000}],"Sales":[{"time":"2014-12-30","value":2246562000},{"time":"2015-12-30","value":2363139000},{"time":"2016-12-30","value":2570803000},{"time":"2017-12-30","value":2788188000},{"time":"2018-12-30","value":2998097000},{"time":"2019-12-30","value":3199517000},{"time":"2020-12-30","value":3936623000},{"time":"2021-12-30","value":5295584000},{"time":"2022-12-30","value":6179727000},{"time":"2023-12-30","value":5541595000}],"Net Margins":[{"time":"2014-12-30","value":0.04927173165040626},{"time":"2015-12-30","value":0.05426003294770219},{"time":"2016-12-30","value":0.05780411801293214},{"time":"2017-12-30","value":0.06862485599966717},{"time":"2018-12-30","value":0.07820327360989321},{"time":"2019-12-30","value":0.08175452732396796},{"time":"2020-12-30","value":0.09316055918994529},{"time":"2021-12-30","value":0.1220456516221818},{"time":"2022-12-30","value":0.12044399372334733},{"time":"2023-12-30","value":0.09391844766714276}],"Assets":[{"time":"2014-12-30","value":892937000},{"time":"2015-12-30","value":936031000},{"time":"2016-12-30","value":994095000},{"time":"2017-12-30","value":1101062000},{"time":"2018-12-30","value":1240871000},{"time":"2019-12-30","value":1483266000},{"time":"2020-12-30","value":1739670000},{"time":"2021-12-30","value":3230131000},{"time":"2022-12-30","value":3565437000},{"time":"2023-12-30","value":3428068000}],"Stockholders Equity":[{"time":"2014-12-30","value":244352000},{"time":"2015-12-30","value":255743000},{"time":"2016-12-30","value":205210000},{"time":"2017-12-30","value":223146000},{"time":"2018-12-30","value":223590000},{"time":"2019-12-30","value":410180000},{"time":"2020-12-30","value":639470000},{"time":"2021-12-30","value":1071393000},{"time":"2022-12-30","value":1235194000},{"time":"2023-12-30","value":1312787000}],"ROE":[{"time":"2014-12-30","value":0.4530022262964903},{"time":"2015-12-30","value":0.5013783368459743},{"time":"2016-12-30","value":0.724150869840651},{"time":"2017-12-30","value":0.857461034479668},{"time":"2018-12-30","value":1.048620242407979},{"time":"2019-12-30","value":0.6377078355843776},{"time":"2020-12-30","value":0.5735030572192596},{"time":"2021-12-30","value":0.603236160773871},{"time":"2022-12-30","value":0.6025863143765271},{"time":"2023-12-30","value":0.39645273757281263}],"ROA":[{"time":"2014-12-30","value":0.21151548205528498},{"time":"2015-12-30","value":0.23099875965646438},{"time":"2016-12-30","value":0.2573788219435768},{"time":"2017-12-30","value":0.25826974321155394},{"time":"2018-12-30","value":0.25295860730083947},{"time":"2019-12-30","value":0.23006392649733765},{"time":"2020-12-30","value":0.2667327711577483},{"time":"2021-12-30","value":0.25781740740545817},{"time":"2022-12-30","value":0.28770190021587816},{"time":"2023-12-30","value":0.2177806857973646}]}

Pool Corporation distributes swimming pool supplies, equipment, and related leisure products in the United States and internationally. The company offers maintenance products, including chemicals, supplies, and pool accessories; repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps, and lights; and building materials, such as concrete, plumbing and electrical components, functional and decorative pool surfaces, decking materials, tiles, hardscapes, and natural stones for pool installations and remodeling. It also provides pool equipment and components for new pool construction and the remodeling of existing pools; irrigation and related products, such as irrigation system components, and professional lawn care equipment and supplies; commercial products, including heaters, safety equipment, commercial decking equipment, and commercial pumps and filters. In addition, the company offers fiberglass pools, and hot tubs and packaged pool kits comprising walls, liners, braces, and coping for in-ground and above-ground pools; and other pool construction and recreational products comprising discretionary recreational and related outdoor living products, such as grills and components for outdoor kitchens. It serves swimming pool remodelers and builders; specialty retailers that sell swimming pool supplies; swimming pool repair and service businesses; irrigation construction and landscape maintenance contractors; and commercial pool operators and pool contractors. Pool Corporation was incorporated in 1993 and is headquartered in Covington, Louisiana.

Sector

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10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Pool Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$868.9M	$1.089B	$1.341B	$1.62B	$1.921B	$2.234B	$2.548B	$2.848B	$3.12B	$3.346B	$3.513B	$35.13B
DCF		$947.1M	$1.014B	$1.065B	$1.098B	$1.111B	$1.102B	$1.071B	$1.02B	$951.2M	$868.5M	$8.685B
Value	$18.93B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 25%

Earnings Stability 91%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	5.4%	5.8%	6.9%	7.8%	8.2%	9.3%	12%	12%	9.4%	9.1%
ROA	23%	26%	26%	25%	23%	27%	26%	29%	22%	19%
ROE	50%	72%	86%	100%	64%	57%	60%	60%	40%	37%

What is the average Net Margin?

The average Net Margin over the past 5 years is +9.83%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.64%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +25.22%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.03%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +64.37%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -9.53%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	2.82	3.35	3.90	7.76	1.93	1.11	4.29	3.14	1.27	1.13
Debt Equity	1.29	2.14	2.38	3.02	1.25	0.65	1.10	1.12	0.80	0.73
MIN
Graham Stability	-	-	100%	100%	100%	100%	100%	100%	89%	89%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 1.13.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.73.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.89.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	12%	13%	12%	-10%	0.49%
Net Income	20%	17%	12%	-30%	-1.2%
Stockholders Equity	30%	42%	27%	6.3%	4.7%
FCF	30%	57%	30%	88%	7.7%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +13.07%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.49%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +17.29%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.22%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +42.48%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +4.75%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +56.91%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +7.73%.