Billionaire Warren Buffett is a lifelong proponent of value investing, famously counseling in 1989 that "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." So when he adds a new company to his Berkshire Hathaway (BRK.B 0.14%) portfolio, you know he thinks it's a solid business that's worth the price he paid.
Or, better yet, an even cheaper price.
Right now, one of the latest batch of Berkshire stock buys is trading for less than Berskhire paid for it. But before you race out to buy shares of Pool Corp (POOL 3.68%), there are some things you should know.
Here's what's changed between then and now.
Buffett takes a dip
Berkshire often buys stocks in batches, often dipping his toes in first before diving in with a big buy. That's exactly what he did with Pool Corp.
It first bought shares in Q3 2024, purchasing just 404,057 shares, which had a market value of "only" $152.2 million at the time. In Q4, it made another small purchase of 194,632 shares, bringing his total stake to just over $200 million, or 1.6% of the company.
In 2025, though, Berkshire got more aggressive, buying 865,311 new shares in Q1. Then, in Q2, it really backed up the truck, picking up nearly 2 million more shares, bringing Berkshire's total stake in Pool to over $1 billion, or 9.2% of the company.
Now it's a "skinnier dip?"
We don't know exactly how much Berkshire paid for each of his Pool shares. But we do know the overall share price range of the stock during each quarter in which Buffett bought the stock. And that data proves that today's investors have a leg up on Buffett.
The lowest Berkshire could have paid for its shares in Q3 2024 was $296.17/share. By Q4, the price had gone higher, and the least it could have paid was $339.32/share. During Q1 2025, Pool's price slipped sharply, and shares could be had for $314.92 apiece near the end of the quarter. Finally, in Q2, when the biggest buy occurred, the stock's low was $285/share.
NASDAQ: POOL
Key Data Points
Right now, shares of Pool are trading at just $283.08/share -- lower than any price Berkshire could have paid. That means investors should pile into the stock right away and beat Buffett at his own game, right?
Well, not necessarily...
Why shares took a dive
Pool Corp, as the name suggests, sells pools. In fact, it's the world's largest wholesaler of pools, pool equipment, parts, and supplies. Its stock price surged during the pandemic lockdowns as demand for at-home leisure options -- like backyard pools -- surged. The end of the lockdown era, followed quickly by rising mortgage rates and falling home construction starts, saw Pool's revenue plummet and prompted growth-focused investors to head for the exits.
The market for new pool installations is still soft and will likely remain soft until the housing market picks back up. That said, only 14% of Pool's revenue comes from selling new pools. Approximately 64% of its revenue comes from servicing, maintaining, and repairing existing pools, which tends to be stable, recurring revenue. However, the market seems unlikely to reward Pool until new installations begin to pick up, so investors should expect further near-term share price stagnation.
But Buffett doesn't focus on the near term. He likes to buy and hold for the long term. With Pool currently trading at a below-average valuation of 26x trailing earnings and offering a 1.73% dividend yield, it's easy to see why Buffett would buy. Like-minded investors who are willing to accept some near-term volatility in exchange for long-term stability and slow-but-steady growth may want to consider buying Pool at its current price. However, it may be smarter to put your money elsewhere and wait to buy Pool until the housing market is showing more signs of an imminent thaw.
