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4 Reasons Why You Should Buy Pool Corp (POOL) Stock Now
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The U.S. leisure industry is poised to be a bright spot for investors in 2017 as improving economic fundamentals and better job prospects are resulting in an increase in consumer confidence. This in turn is leading to strong consumer discretionary spending which makes it the right time to add a few leisure stocks to your portfolio. World's largest wholesale distributor of swimming pool supplies, equipment and related products -- Pool Corp. (POOL - Free Report) -- is one such company that is worth considering.
Stock Price Movement: Pool’s shares have increased 39.6% over the past one year widely outperforming the Zacks categorized Leisure & Recreation Products industry’s gain of 2.2%. The company’s operational advantages, given its market share and scale, along with the rise in new pool construction, should aid the stock in maintaining its solid performance in the quarters ahead.
A Positive Macro Outlook: The 2017 outlook for the U.S. homebuilding industry is quite compelling given affordable interest rates, housing starts and new home sales below historical levels, and tight inventory indicating pent-up demand.
Moreover, stronger consumer discretionary spending evidenced by the company’s increase in sales of pool construction materials and ancillary equipment and supplies as consumers continue to invest in enhancing their outdoor living spaces along with a tight supply situation, point to consistently robust demand for 2017.
Overall, trends continue to benefit from steady gains in consumer-discretionary spending, as homeowners increasingly look to remodel and replace older pools and migrate to higher-end products after deferring many of those decisions during the housing downturn. Additionally, indicators for new pool construction remain favorable with increasing numbers of millenials purchasing homes, increasing home values and single-family homeowner equity, and expectations for reduced banking regulations leading to increase in available capital with the homeowners. Moving ahead, all of these are expected to drive continued growth in new pool construction.
Other Returns: Pool delivered return on equity (ROE) of a massive 69.9% in the trailing 12 months, compared with the industry’s gain of 9.8%. This indicates that the company reinvests considerably more efficiently compared with its peers.
Also, the company continuously returns wealth to shareholders via dividends and share repurchases. In 2016, 2015, 2014 and 2013, the company returned almost $228 million, $136 million, $169 million and $128 million, respectively, through stock repurchases and dividends. Such healthy capital deployment initiatives’ is sure to boost investors’ confidence in the stock.
Earnings History and Estimate Revisions: Notably, Pool’s earnings beat/meet the Zacks Consensus Estimate consistently over the past 10 consecutive quarters, with an average positive surprise of 19.93% in the trailing four quarters.
Over the past 60 days, current quarter and current year earnings estimates have moved up 2.6% and 7.4%, respectively. The positive earnings estimate revisions indicate analysts’ confidence in the stock and also adds to the optimism. Further, for full-year 2017, EPS and sales are expected to grow a solid 17.4% and 5.8%, respectively.
Other Stocks to Consider
Other favorably-placed stocks in the Consumer Discretionary sector include Marcus Corporation (MCS - Free Report) , Royal Caribbean Cruises Ltd. (RCL - Free Report) and Intrawest Resorts Holdings, Inc. (SNOW - Free Report) . While Marcus sports the same Zacks Rank as Pool, Royal Caribbean and Intrawest Resorts carry a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Marcus’ 2017 earnings climbed 9.5%, over the past 60 days. Further, for 2017, EPS is expected to grow 10.3%.
Royal Caribbean’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 22.26%. Meanwhile, for 2017, EPS is expected to improve 15.4%.
The Zacks Consensus Estimate for Intrawest Resorts Holdings’ fiscal 2017 earnings climbed nearly 26% over the past 60 days. Moreover, the trailing four-quarter average earnings surprise is a positive 8.71%.
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4 Reasons Why You Should Buy Pool Corp (POOL) Stock Now
The U.S. leisure industry is poised to be a bright spot for investors in 2017 as improving economic fundamentals and better job prospects are resulting in an increase in consumer confidence. This in turn is leading to strong consumer discretionary spending which makes it the right time to add a few leisure stocks to your portfolio. World's largest wholesale distributor of swimming pool supplies, equipment and related products -- Pool Corp. (POOL - Free Report) -- is one such company that is worth considering.
The stock sports a Zacks Rank #1 (Strong Buy), which indicates robust fundamentals and expectations of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
What Makes Pool a Solid Choice?
Stock Price Movement: Pool’s shares have increased 39.6% over the past one year widely outperforming the Zacks categorized Leisure & Recreation Products industry’s gain of 2.2%. The company’s operational advantages, given its market share and scale, along with the rise in new pool construction, should aid the stock in maintaining its solid performance in the quarters ahead.
A Positive Macro Outlook: The 2017 outlook for the U.S. homebuilding industry is quite compelling given affordable interest rates, housing starts and new home sales below historical levels, and tight inventory indicating pent-up demand.
Moreover, stronger consumer discretionary spending evidenced by the company’s increase in sales of pool construction materials and ancillary equipment and supplies as consumers continue to invest in enhancing their outdoor living spaces along with a tight supply situation, point to consistently robust demand for 2017.
Overall, trends continue to benefit from steady gains in consumer-discretionary spending, as homeowners increasingly look to remodel and replace older pools and migrate to higher-end products after deferring many of those decisions during the housing downturn. Additionally, indicators for new pool construction remain favorable with increasing numbers of millenials purchasing homes, increasing home values and single-family homeowner equity, and expectations for reduced banking regulations leading to increase in available capital with the homeowners. Moving ahead, all of these are expected to drive continued growth in new pool construction.
Other Returns: Pool delivered return on equity (ROE) of a massive 69.9% in the trailing 12 months, compared with the industry’s gain of 9.8%. This indicates that the company reinvests considerably more efficiently compared with its peers.
Also, the company continuously returns wealth to shareholders via dividends and share repurchases. In 2016, 2015, 2014 and 2013, the company returned almost $228 million, $136 million, $169 million and $128 million, respectively, through stock repurchases and dividends. Such healthy capital deployment initiatives’ is sure to boost investors’ confidence in the stock.
Earnings History and Estimate Revisions: Notably, Pool’s earnings beat/meet the Zacks Consensus Estimate consistently over the past 10 consecutive quarters, with an average positive surprise of 19.93% in the trailing four quarters.
Over the past 60 days, current quarter and current year earnings estimates have moved up 2.6% and 7.4%, respectively. The positive earnings estimate revisions indicate analysts’ confidence in the stock and also adds to the optimism. Further, for full-year 2017, EPS and sales are expected to grow a solid 17.4% and 5.8%, respectively.
Other Stocks to Consider
Other favorably-placed stocks in the Consumer Discretionary sector include Marcus Corporation (MCS - Free Report) , Royal Caribbean Cruises Ltd. (RCL - Free Report) and Intrawest Resorts Holdings, Inc. (SNOW - Free Report) . While Marcus sports the same Zacks Rank as Pool, Royal Caribbean and Intrawest Resorts carry a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Marcus’ 2017 earnings climbed 9.5%, over the past 60 days. Further, for 2017, EPS is expected to grow 10.3%.
Royal Caribbean’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 22.26%. Meanwhile, for 2017, EPS is expected to improve 15.4%.
The Zacks Consensus Estimate for Intrawest Resorts Holdings’ fiscal 2017 earnings climbed nearly 26% over the past 60 days. Moreover, the trailing four-quarter average earnings surprise is a positive 8.71%.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>