Pool Corporation (NASDAQ:POOL) is a cyclical play on the North American housing market. Pool is the largest wholesale distributor of swimming pool products in North America. The company also sells irrigation systems and landscape equipment and supplies.
While Pool is the market leader in a niche industry, shares have gotten ahead of themselves. Shares are now overvalued from an intrinsic value standpoint as well as requiring near-perfect conditions going forward. The most concerning aspect is that any hiccup in the economy or downturn, can have a serious impact on the company's top- and bottom-lines. This is a pattern that has been repeated in the past and will happen again in the near future. The question is not if,...
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