Investing
- Warren Buffett has been a net seller of stocks lately, but he bought 12 stocks in Q2, including six new positions.
- Buffett has a history of building stakes over multiple quarters, even buying back Berkshire Hathaway shares for 25 quarters.
- He’s now consistently buying one stock for four quarters, showing strong conviction in its future.
- Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better. Click here to learn more.
A Surprising Shopping Spree
As his illustrious investing career winds down, Warren Buffett remains one of the most closely watched investors. No other investor attracts the kind of following and loyalty as the Oracle of Omaha. Every move he makes is pored over by analysts and investors to parse what move he might make next.
Although Buffett’s been a net seller of stocks in recent years, shedding billions in holdings, he went on a mini buying binge in the second quarter, adding or initiating new positions in a dozen stocks for Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B), including six brand-new names.
This isn’t the first time Buffett has indulged in a buying spree. Over the years, he has methodically built stakes in companies across multiple quarters, a strategy he famously applied even to Berkshire Hathaway’s own stock, buying back shares for 24 consecutive quarters before abruptly stopping in last year’s second quarter.
Now, Buffett seems to be back at it, steadily accumulating one particular stock for four straight quarters, signaling strong conviction. Let’s see whether this company should become your own must-buy stock.
Diving Into the Deep End
Pool (NASDAQ:POOL) is a leading distributor of pool supplies, equipment, and related leisure products, and has quietly become a Buffett favorite. The company serves a niche but resilient market, supplying everything from chemicals to pool pumps for residential and commercial pools.
Buffett’s interest in POOL has grown steadily, with his purchases accelerating over the past four quarters:
- Q3 2024: 404,057 shares
- Q4 2024: 194,632 shares
- Q1 2025: 865,311 shares
- Q2 2025: 1,994,885 shares
By the second quarter, Buffett’s stake in POOL reached nearly 3.5 million shares, representing about 0.4% of Berkshire’s massive portfolio. While this is a modest slice of his total holdings, the increasing size of his purchases — particularly the near-2-million-share haul in Q2, which is more than double the previous quarter’s buy — suggests growing confidence in the company’s long-term prospects.
POOL’s business model, which thrives on recurring demand for pool maintenance and supplies, aligns with Buffett’s preference for steady, predictable cash flows.
A Dividend Darling
One of POOL’s standout features is its reliable dividend, currently yielding 1.5%. The company has raised its payout for 14 consecutive years, with an impressive 18.5% compound annual growth rate (CAGR) over the past five years. This consistency and growth make it a classic Buffett pick: a company with a durable competitive advantage, or “moat,” that generates consistent returns for shareholders.
While POOL isn’t a household name, its dominance in the pool supply industry — where barriers to entry are high due to its extensive distribution network — makes it a compelling choice for investors seeking stability and income.
Building on the Housing Market
Buffett’s growing stake in POOL may reflect a broader bet on the housing market, though the company’s revenue primarily comes from maintenance and supplies rather than new pool construction. With housing starts fluctuating, POOL’s business remains resilient, as existing pools require ongoing care regardless of market cycles.
Yet Buffett also rebuilt his stakes in the industry, buying shares of builders D.R. Horton (NYSE:DHI), Lennar (NYSE:LEN), and NVR (NYSE:NVR).
POOL stock’s recent performance, however, has been lackluster, down 6% over the past year and 18% below its 52-week high. This dip may have caught Buffett’s eye, as he’s known for buying quality companies at reasonable valuations.
Key Takeaway
Pool’s stock may be down, but its fundamentals remain strong, and Buffett’s increasing purchases signal confidence in its future. While POOL represents a small portion of Berkshire’s portfolio, its growing presence suggests it’s more than a passing fancy.
The company’s 1.5% dividend yield, paired with a 14-year streak of increases, makes it attractive for income-focused investors. Although tied to the housing market, POOL’s focus on maintenance ensures steady demand. As Buffett’s latest must-buy stock, POOL might just deserve a spot in your portfolio, too.
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