Stock Analysis | Pool Outlook - A Technical and Fundamentals Divergence

Market Snapshot

Takeaway: Pool (POOL) is currently showing a bearish technical outlook with weak momentum and several negative signals, while fundamentals remain mixed. Current price trend is down -1.70%, with an internal diagnostic score of 1.34 out of 10.

News Highlights

• 2025-07-24: How distributors are solving supply chain challenges. Relevance: Pool, as a player in the distribution industry, is likely affected by ongoing supply chain disruptions. These articles suggest that the distribution sector is adapting to logistical and economic pressures, which could weigh on POOL’s margins.
• 2025-01-07: 2025 Challenges Distributors and Wholesalers Need To Consider. Relevance: Political and economic shifts are likely to pressure the distribution sector, where Pool operates. This could explain the bearish sentiment in technical indicators and mixed analyst views.
• 2024-09-04: Top 3 Challenges for Industrial Distributors. Relevance: Supply chain disruptions are cited as a top issue. For Pool, this could translate into delayed delivery schedules and increased costs, potentially impacting future earnings.

Analyst Views & Fundamentals

Average Rating: The simple average of the recent analyst ratings is 3.50, indicating a generally neutral outlook. The performance-weighted rating is 2.31, favoring a more bearish stance based on historical performance.

Rating Consistency: Analysts are divided in their views. One analyst (David Manthey from Baird) has a strong historical win rate of 66.7%, while another (Scott Schneeberger from Oppenheimer) has a weak historical win rate of 33.3%. This inconsistency highlights a lack of consensus on the stock’s direction.

Price Trend Alignment: The current price trend is down (-1.70%), and the weighted expectations from analysts align with this bearish movement. However, the fundamental scores show some divergence in performance and margin strength.

Key Fundamental Factors:

• Price-to-Sales (PS): 6.75 (Group 4, internal diagnostic score: 0.31). A higher PS ratio could suggest overvaluation or weak earnings.
• Return on Equity (ROE) YoY growth rate: 16.46% (Group 4, internal diagnostic score: 0.31). Positive growth in ROE is a good sign, but it does not compensate for other negative fundamentals.
• Net Profit Margin (NPM): 8.68% (Group 4, internal diagnostic score: 0.31). A relatively healthy margin, but it's not enough to offset the negative momentum from other indicators.
• Rate of return on total assets: -9.03% (Group 1, internal diagnostic score: 0.31). Negative ROA is a red flag, indicating poor asset utilization.
• Current liabilities / Total liabilities: 34.05% (Group 4, internal diagnostic score: 0.31). A high proportion of short-term debt could signal liquidity risk.

Money-Flow Trends

The fund-flow analysis for Pool shows a mixed picture of retail and institutional activity:

• Overall Inflow Ratio: 0.4955 (slightly bearish). The score of 7.81 (good) indicates positive retail and institutional inflows in the short term, but the overall trend is negative.
• Small & Medium Retail Inflows: Both have inflow ratios above 0.50, indicating strong retail participation. Small retail inflow ratio is 0.5074, and medium is 0.5074.
• Institutional Flows (Large and Extra-large): Slightly bearish with inflow ratios of 0.5022 and 0.4905, respectively. Block inflow ratio is 0.4938, reinforcing the bearish trend.

Key Technical Signals

Pool's technical outlook is clearly bearish, with 8 bearish indicators versus 0 bullish ones in the last 5 days. The technical score is 1.34 out of 10, reflecting weak market sentiment.

• WR Overbought: Internal diagnostic score of 1.00. A strong bearish signal indicating overbought conditions.
• RSI Overbought: Score of 1.00. Suggests overbought conditions and potential price correction.
• MACD Death Cross: Score of 2.79. A bearish signal indicating a shift in momentum.
• Bearish Engulfing: Score of 1.00. A classic bearish candlestick pattern.
• Ex-Dividend Date: Score of 1.00. Suggests price weakness around ex-dividend activity.

Recent Indicators by Date:

• 2025-08-28: Bearish Engulfing, Dividend Payable Date.
• 2025-08-21: MACD Death Cross.
• 2025-08-15: Bearish Engulfing.
• 2025-08-14: WR Overbought, Ex-Dividend Date, Dividend Record Date.
• 2025-08-13: WR Overbought, RSI Overbought, MACD Golden Cross.

Key Insight: The technical momentum is weak, and the market appears to be in a bearish phase. Investors are advised to avoid entering new positions without a clear reversal signal.

Conclusion

Actionable Takeaway: Given the weak technical signal (1.34/10), mixed analyst ratings (3.50 average, 2.31 performance-weighted), and negative money-flow trends, consider waiting for a clearer trend reversal or improved technical conditions before investing in Pool. Keep an eye on upcoming earnings and any significant supply chain developments in the distribution industry, as these may influence the stock's direction.