1 Top Stock to Buy Right Now That Warren Buffett Has Been Buying

Key Points

• Berkshire Hathaway has been accumulating Pool Corp shares over the last few quarters.

• Pool's fundamentals look resilient, with steady margins and a rising full-year earnings outlook.

• At roughly a high-20s price-to-earnings multiple, the stock isn't cheap. But it's reasonable for a quality distributor with a long runway.

• 10 stocks we like better than Pool ›

Berkshire Hathaway has been adding to its fairly new position in Pool Corporation (NASDAQ: POOL), the world's largest wholesale distributor of swimming pool and outdoor-living products, across recent quarters. The stake began modestly, then grew meaningfully through mid-2025. While these purchases were likely initiated by one of Warren Buffett's investment deputies, they still land in Berkshire's portfolio -- ultimately reflecting indirect interests of Buffett himself -- and deserve investor attention.

Pool isn't a flashy artificial intelligence (AI) name. It's a boring, profitable distributor that serves roughly 125,000 professional customers through more than 450 sales centers across North America, Europe, and Australia. That scale matters in a fragmented industry, and the company's results this summer show a business that's holding up well despite a still-mixed consumer backdrop.

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Image source: Getty Images.

Steady execution

Pool Corp's second-quarter results, released July 24, highlighted the company's solid progress in a challenging, high-interest rate market. Net sales ticked up 1% year over year to about $1.8 billion, gross margin held at 30%, operating margin remained 15.3%, and earnings per share rose 4% to $5.17. Management also guided for robust full-year earnings per share of $10.80 to $11.30. Sure, these aren't mouthwatering numbers, but Pool's business looks healthy in the context of high interest rates weighing on discretionary purchases.

Pool's business mix also shows why the company remains resilient, despite market pressures. Its earnings power is anchored by recurring maintenance product -- chemicals, parts, and supplies that pool owners need regardless of new construction trends. In the first half, maintenance strength offset still-subdued discretionary categories like new pool builds and renovations.

Pool Corp CEO Peter Arvan highlighted this balance in the company's second-quarter earnings release: "we saw sales expansion, reflecting continued growth in maintenance products and improving trends on discretionary spending," while noting continued investment in customer experience and technology to support long-term growth.

Those comments line up with the company's behavior: Pool opened its 450th sales center, kept expenses tight (up just 1% in the quarter), and continued buying back its stock -- spending about $156 million on repurchases in the first six months of the year.

Viewed against earlier 2025 softness (first-quarter earnings per share declined sharply year over year to $1.42 as weather and timing weighed on results), the second-quarter rebound and maintained full-year outlook suggest the business is progressing through a choppy environment without giving up much ground.

Should you buy shares, too?

Berkshire's 13F shows Pool was a small holding at year-end 2024 and a much larger one by the end of Q2. The position now sits at roughly 3.46 million shares, up from about 0.60 million at the end of last year. That's a meaningful vote of confidence from a firm that favors cash-generative, moat-protected businesses.

Valuation is the right next question. As of this writing, shares trade around $323. Pool, therefore, trades at roughly 27 times earnings; on the company's updated 2025 outlook (midpoint near $11.05), the effective price-to-earnings multiple lands in the high-20s. That isn't cheap -- especially if discretionary categories stay sluggish -- but it's not unreasonable for a scaled distributor with sticky, recurring demand, mid-teens operating margins in peak season, and a long history of disciplined capital allocation.

But risks remain. Higher interest rates can dent big-ticket projects like new pool construction, weather can shift seasonal timing, and competition from mass merchants can pressure prices in select categories. But Pool's mix helps: maintenance products provide a recurring baseline, while the company's branch network, private-label offerings, and digital tools (POOL360) deepen relationships with professional customers. Add a modest dividend ($1.25 per quarter) and ongoing buybacks, and total-return potential looks compelling if earnings can climb from here.

Overall, Berkshire's accumulation, Pool's resilient fundamentals, a reasonable (if not attractive) valuation, and a business model built on repeat demand make Pool look like a good stock to buy and hold from here.

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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.