Soft Demand Weighed on Pool Corp.'s (POOL) Shares

Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors SMid Cap Strategy trailed the Russell 2500 Growth Index, returning -2.71% vs. 0.33% for the Index. Relative performance fluctuated throughout the quarter.  Negative stock selection in Industrials and Real Estate drove underperformance in the quarter, while underweight in the volatile biotechnology industry also impacted relative returns. Nevertheless, positive stock selection in Financials and Basic Materials countered these losses. From a factor standpoint, a "tug-of-war" between high- and low-quality elements lasted throughout the quarter. For the full year, the composite delivered a total return of -4.71% net of fees, compared to the benchmark’s 10.31% return. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted Pool Corporation (NASDAQ:POOL). Pool Corporation (NASDAQ:POOL) is a leading distributor of swimming pool supplies, equipment, related leisure, irrigation, and landscape maintenance products. On February 19, 2026, Pool Corporation (NASDAQ:POOL) stock closed at $218.36 per share. One-month return of Pool Corporation (NASDAQ:POOL) was -17.61%, and its shares fell 36.52% over the past 52 weeks. Pool Corporation (NASDAQ:POOL) has a market capitalization of $8.13 billion.

Conestoga Capital Advisors stated the following regarding Pool Corporation (NASDAQ:POOL) in its fourth quarter 2025 investor letter:

"Pool Corporation (NASDAQ:POOL) is the largest distributor of swimming pool supplies, equipment, and related outdoor products in the United States. The shares lagged as demand remained pressured by a slower housing and discretionary spending environment. Reduced new pool construction and renovation weighed on volumes. The company’s maintenance business is holding up well but deflation in its tricolor chemical business is pressuring revenue. Despite these headwinds, POOL’s scale, distribution advantages, and strong cash generation continue to support its long term business fundamentals."

Pool Corporation (NASDAQ:POOL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 41 hedge fund portfolios held Pool Corporation (NASDAQ:POOL) at the end of the third quarter, compared to 44 in the previous quarter. While we acknowledge the potential of Pool Corporation (NASDAQ:POOL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Pool Corporation (NASDAQ:POOL) and shared a list of mid-cap stocks to buy according to top investors. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.