My No. 1 Summer Stock to Buy
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Summer is often a dull time to buy American stocks. As I said last week, Wall Street whales often go on holiday, taking liquidity along with them on their 50-foot yachts.
However, long-term investors dare less likely to mind. It’s hard to imagine Warren Buffett caring much about stock prices while he’s sipping a Cherry Coke on the beach.
But the volatility has been much tougher for day traders, with many finding themselves in trouble this year. For example…
- Shares of Space Exploration Technologies Corp. (SPCX) briefly dipped below their IPO price last week.
- Chipmakers have tumbled from their June highs.
- And many former meme stocks like Lucid Group Inc. (LCID) and Herts Global Holdings Inc. (HTZ) are now teetering on bankruptcy.
Nevertheless, there’s always a bull market somewhere. Many retailers in the Far East have a “Second Thanksgiving” in summer. And some American sectors like oil & gas never actually go on holiday. I wrote in May how gasoline refiner PBF Energy Inc. (PBF) would surge thanks to peak summer demand; shares have surged 33% since then on peak summer demand.
To help investors minimize these summer risks, Keith Kaplan and his TradeSmith team have created a quantitative Seasonality tool that precisely identifies the best days to buy a particular stock. With this software, you don’t have to guess when to buy Costco Wholesale Corp. (COST) for the year-end “Santa Claus” rally. Instead, you will know that October 27 is exactly the right date to get in.
To illustrate the power of Keith’s creation, I’d like to bring you one more stock this week that the system has flagged. It is a summer darling that does swift business in warm months… and I believe it’s at the start of a multi-year turnaround.
The company has passed other quantitative screens, and Keith’s system shows this coming week is the best time to buy. After all, shares have historically returned a stunning 35.6% between July 24 and August 17, as shown in the chart below.
Historically one of late summer’s best stocks
So, let’s “dive” into the details…
My No. 1 Stock for the Summer of 2026
Every summer, my neighborhood turns into a buzz of activity.
People are out barbecuing…
Music is playing…
And this year, there was a new sound across the street: the splashing of water in a pool.
You see, my neighbors installed a new in-ground pool earlier this year. And now that it’s warm, they seem determined to get every minute of splash time in before fall arrives.
They’re not alone. Since 2025, demand for in-ground pools in the U.S. has stabilized after collapsing in the post-Covid-19 years. Many Americans are finally reopening their wallets and getting that swimming pool they’ve always wanted.
To buy into that trend, my favored pick is America’s largest supplier of in-ground pools:
Latham Group Inc. (SWIM).
Latham is a New York-based company that installs roughly one in every five new in-ground pools in America. They are particularly dominant in fiberglass pools, and the stock chart above belongs to them.
Here’s why I believe shares are worth buying today.
The Cycle Has Turned
Few businesses swing as violently with the economy as a swimming pool maker. A new in-ground pool can cost $50,000 or more, making it an “affordable luxury” that’s sometimes more “luxury” than “affordable.” So, when stimulus checks and near-zero interest rates collided with stay-at-home nesting during the Covid-19 pandemic, Americans poured into their backyards, sending Latham’s revenues to a record $696 million peak in 2022.
Then the interest rate shock hit. Pool demand cratered, and Latham’s sales collapsed 27%. Below is a graph showing the number of new pools added per year, with light-blue bars reflecting estimates.
New pool starts collapsed after the Covid-19 pandemic
Source: Latham investor relations
But something important happened this year: New U.S. pool construction stopped going down. Latham’s management now expects the market to be “about flat to last year,” and is modeling significant growth going forward. My big-spending neighbors seem to be part of a broader trend.
In fact, this view might even be too bearish. Demand for other affordable luxuries like marine craft, high-end decking, and air travel is on the rise. Mercury Marine owner Brunswick Corp. (BC) announced a “beat and raise” quarter earlier this spring; analysts expect their boat sales to rise 8% this year, compared to a 2% decline last year. Airlines are all guiding higher, too.
I’m also not so worried about low consumer survey sentiment numbers, which on average have reached record lows. Latham’s core market is in the “Sand States” (Florida, Texas, Arizona, and California), and three of them lean Republican – a cohort that has remained optimistic about the economy. Below is a chart that shows consumer sentiment, separated by political views.
The University of Michigan Consumer Sentiment, divided by political affiliation
Source: University of Michigan
Put another way, not every consumer needs to feel great about the economy. As long as the cohort interested in $50,000 in-ground pools are spending money, then Latham should come out ahead. And Keith’s quantitative tool has flagged this week as the best time to play that insight.
The Self-Help Engine
Latham is also riding a broader American trend towards fiberglass pools. That means revenues should rise even if pool starts remain flat. Here’s why…
Fiberglass pools are premade shells that need just two to three days to install, rather than the eight to 16 weeks for a traditional gunite pool (concrete over steel bars). Fiberglass versions are significantly cheaper to install (often half the cost) and only require refinishing every 20 years. (Gunites need resurfacing every 10 years to 15 years, while vinyl liner pools need replacement every five 10.)
American homeowners are steadily catching on. Fiberglass has climbed to about 23% to 24% of U.S. in-ground pools, up from 17% to 18% in 2019, and is growing at double digits in states like Florida.
For context, 70% of in-ground pools in Australia are fiberglass, so the U.S. growth runway is long.
Together, that means 2025 was already a growth year for Latham, despite fewer overall pool starts. Sales rose 7% to $546 million, and became the company’s first profitable year (on a reported GAAP basis) since its 2021 IPO. Management is now guiding for another 9% growth in 2026, and that figure could be far higher if strong sales of boating and other big-ticket items are a guide.
I should also note that roughly half of Latham’s revenues come from pool liner and cover replacements, providing an additional source of income.
The Insiders are Buying
In May, two Latham insiders bought stock in the open market:
- Chief Financial Officer Oliver Gloe bought about $74,000’s worth at $4.90
- Director James Cline bought roughly $242,000’s worth at $4.84.
CFO buys are my favorite type of buying signal. Studies have found that CFO buys perform twice as well as CEO buys, and these purchases came with no sells by any insider.
I pay close attention to these purchases, because they are one of the most honest signals on Wall Street. Executives can sell for a hundred reasons, including college tuition, a new house, diversification… or perhaps a new in-ground pool. But they buy for only one:
They think the stock is going higher.
And when two insiders are buying shares (with no selling by anyone else), it’s a sign they know something the rest of the market does not. They may have been early relative to the “Buy” signal provided by Keith’s tool… but there’s no harm in getting in sooner rather than later.
Of course, there are risks in the short term. First is randomness: One of my recommended seasonal stocks last week, Coupang Inc. (CPNG), dropped almost 10% out of the gate because of an unexpected South Korean court ruling. Second is Latham’s volatile earnings. The company’s annual interest payments of $26 million are large relative to its $30.6 million of operating income last year, so even tiny changes in operating income will have enormous effects on the bottom line. And third is America’s recovery: If the U.S. suddenly goes into a recession, then no cyclical consumer stock will be spared.
Nevertheless, the three factors cut both ways. And so, I’m flagging Lantham as a stock worth owning as America dives back into the deep end.
Getting the Timing Right
I’ve had my eye on Latham for a while now. The company runs a perfectly understandable business, has a clear profit engine, and its new CEO (who replaced a retiring one) has excellent experience in selling pricey home goods. Before joining Latham as CEO, Sean Gadd ran the North American business of James Hardie Industries plc (JHX).
Yet, the timing on Latham has never been quite clear. Shares of the leveraged stock seem to move almost randomly: a 22% decline in March… a 11% rally in April… another 20% collapse in early May…
2026 has been a guessing game for Latham’s stock.
But with Keith’s trading system, much of that uncertainty goes away. Seasonal trends become clearer, and buying opportunities start presenting themselves.
Click here to watch Keith’s Breakthrough 2026 event to learn more about his Seasonality software.
Until next week,
Thomas Yeung, CFA
Market Analyst, InvestorPlace
