Warren Buffett’s 10 New Stock Picks

2. Pool Corp (NASDAQ:POOL)

Shares held by Berkshire Hathaway: 404,057

Stake Acquired: Q3 2024

The next two stocks that we will cover in the list of Warren Buffett’s 10 new stock picks represent positions opened during the third quarter of 2024 and disclosed in Berkshire’s latest 13F filing. One of them is Pool Corp (NASDAQ:POOL), in which Berkshire acquired some 404,000 shares worth $152.25 million.

Pool Corp is the leading global distributor of swimming pool equipment, parts, and supplies. The company operates more than 400 sales centers in North America, Europe, and Australia. It has faced some headwinds this year, with sales falling on the back of weaker consumer spending. With higher interest rates and challenging housing market, homeowners are less inclined to spend a lot of money on luxury items like swimming pools. Nevertheless, Pool Corp (NASDAQ:POOL) managed to narrowly beat EPS estimates for the last three quarters and reported low single-digit revenue declines.

Buffett and other investors have many reasons to be bullish on Pool Corp (NASDAQ:POOL). The company is a global industry leader and has a large distribution network, which gives it a competitive edge. Moreover, besides selling swimming pool equipment, the company also sells supplies that are required for pool maintenance, which result in a steady revenue stream. Pool Corp (NASDAQ:POOL) is also run by a seasoned team and its management and board of directors is committed to return capital to shareholders through dividends and buybacks.

On the other hand, trading at 2.6 times its sales and 29.7 times its forward earnings, puts Pool Corp (NASDAQ:POOL) at the higher end of valuation. The Street seems to share the same view, as the stock has a consensus Hold rating and a price target of $369, which implies little upside.