Pool Corp scores 96 for management and 38 for moat. The management score rests on a return on invested capital of 15.4% and a gross margin of 29.7% — figures that describe a business turning capital into profit efficiently. Debt sits at 1.30x equity. The narrow moat and exceptional management are not the same judgement, and the gap between them is where the argument about this business sits.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 6.1% a year, the rate measured from the filings. The exit multiple assumed is 12.2x. That produces an intrinsic value of $59.04, a 10-CAP price of $178.39 and a payback time price of $187.88, with the value zone set at the highest of the three, $187.88. Today's price of $160.67 sits inside that zone.
The price sits inside the value zone, but the business scores 38 for moat and 96 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $160.67 |
| Market cap | $5.9B |
| P/E ratio | 14.8x |
| Return on invested capital | 15.4% |
| Gross margin | 29.7% |
| Debt to equity | 1.30x |
| Free cash flow yield | 3.6% |
| Growth rate used | 6.1% |
| Growth rate measured | 6.0% |
| Exit multiple assumed | 12.2x |
| Company | Moat | Buy price |
| Watsco, Inc. (WSO) | 45 | $208.47 |
| Wesco International Inc (WCC) | 44 | $120.04 |
| Fastenal (FAST) | 80 | $10.91 |
| W. W. Grainger (GWW) | 73 | $429.51 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Pool Corp rather than accepting ours.