Idea #8 POOL corporation

I came across POOL corporation while screening for stocks that have experienced negative returns for 3+ years.  Among the list of these losers, Pool had some positive attributes that made me want to look further at it:

- three years of investor losses, investor exhaustion, magnified by broad market recovery.  No one wants to own a loser when the market is rallying.   

- 70% to 80% of revenue is non-discretionary maintenance related.  This stock is treated like a recreational/discretionary stock but it sells stuff that is absolutely required if you own a pool. 

- Revenues, margins and operating profits took a hit during recession but cashflow increased.

- Stock price is 60% off of all time high, yet earnings off 30% and cashflow is currently at an all time high.

- shrinking shares - they are buying back shares consistently & rapidly

- by far the largest company in the pool supply business

- Huge cashflow.  Pool installations are down 75% in the last few years yet cashflow is at an all time high.  Pool installations aren't as relevant as market thinks. 

- Hidden earnings.  Latham Acquisition Corp (unconsolidated subsidiary) clouds earnings by 59 cents in most recent quarter.

Negatives:
I don't understand what competitive advantages a distributor can have.
They have few hard assets underlying balance sheet
They are just a distributor, can't home depot beat them if they wanted?
very competitive market, no moat
A history of growth by acquisition