Warren Buffett’s Berkshire Hathaway recently initiated a position in Pool Corp.
Buffett and his team continued to add to the Pool Corp. position in recent months.
The big story for the company is not going to play out over a year or two.
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Warren Buffett, the CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), is one of the richest men in the world. He is also one of the most famous investors to ever work on Wall Street. And this billionaire and his investment team is buying shares of Pool Corp. (NASDAQ: POOL).
Here’s why buying this stock could be a good idea, but only if you do it like Buffett has.
Image source: The Motley Fool.
Buffett is the CEO of a company that’s unique. It is a hugely diversified conglomerate, with a collection of businesses that span finance, manufacturing, energy, and many more sectors.
It is hard to fully explain the breadth of the businesses owned by Berkshire Hathaway. That said, the fact that the company’s umbrella covers more than 180 owned businesses helps highlight the expansive reach. And, on top of that, the company has a portfolio of individual stocks, too. Pool Corp. is in that stock portfolio.
In many ways, Buffett is really overseeing a portfolio of investments, sort of like a mutual fund. Buying Berkshire Hathaway stock is basically investing alongside the billionaire. Which means that Buffett’s approach is extra important to consider.
While Buffett hasn’t actually explained it in detail, he has provided a broad outline. He likes to buy well-run companies when they are attractively priced. And then he holds for the long term to benefit from the growth of the businesses over time. That last part is the key, and perhaps the hardest thing to do.
Pool Corp. is a retailer that sells the supplies needed to build and maintain pools. There are two very different sides to its business. Building pools is somewhat cyclical in nature. Low interest rates and a strong economy tend to result in higher pool construction rates.
High rates…
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