2 Fast-Growing Outdoor Recreation Stocks To Buy: Pool And Brunswick

NASDAQ: POOL | Pool Corporation News, Ratings, and Charts

The recreation industry experienced a significant decline in revenue and business operations in early 2020 due to the closure of nonessential businesses and social distancing measures. Many companies furloughed workers as a cost-cutting measure to stay afloat.

However, as social distancing norms eased post-lockdown, the companies in the industry soon regained their business momentum with strong corporate management. This is evident in Invesco Dynamic Leisure and Entertainment ETF’s (PEJ) 40.1% gain over the past six months.

As the COVID-19 vaccination deployment continues around the world, the recreation sector is expected to grow substantially this year as people are likely to engage in outdoor recreational activities after months-long social distancing regulations and remote lifestyles. We think this should benefit leisure stocks like Pool Corporation (POOL - Get Rating) and Brunswick Corporation (BC - Get Rating).

Pool Corporation (POOL - Get Rating)

POOL is a distributor of swimming pool supplies, equipment, and related leisure products. The Company serves primarily swimming pool remodelers and builders, specialty retailers, swimming pool repair and service businesses, irrigation construction and landscape maintenance contractors, and other commercial entities. POOL has been included in the S&P 500 Index since October last year.

POOL’s revenue has increased at a CAGR of 10.6% over the past three years, while total assets rose at a CAGR of 12.3% over the same period. This reflects the company’s strong growth potential.

The company’s net sales have increased 26.8% year-over-year to $1.14 billion in the third quarter ended September 30, 2020. Its operating income has increased 41.8% year-over-year to $148.23 million over the same period, while its EPS improved 49.2% year-over-year to $2.97.

Analysts expect POOL’s revenue to grow 20.1% year-over-year to $699.45 million in the fourth quarter ended December 31, 2020. The consensus EPS estimate of $0.76 for the current quarter indicates a 72.7% rise year-over-year. The company has an impressive earnings surprise history; it beat the Street EPS estimates in each of the trailing four quarters. POOL has gained 24.4% over the past year.

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