Did Warren Buffett Just Validate Home Depot's Strategy?
Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) just released its stock purchases and sales for the third quarter, and Buffett's conglomerate did little buying in the quarter.
One of Berkshire's two new purchases in the quarter was Pool Corp. (NASDAQ: POOL), a maker of swimming pool supplies and equipment, as well as related leisure products. (The other was Domino's Pizza). Buffett doesn't explain his company's stock purchases, but observers know the kinds of businesses that he favors.
He looks for companies with sustainable competitive advantages, a straightforward business model, and an attractive valuation. Pool Corp. is the largest wholesale distributor of pool supplies, giving it an advantage in an industry where scale and proximity to the customer are key. It also operates in an attractive growth market in building supplies.
Source Fool.com
