Baron Funds Projects a Bright Future in Trex Co. (TREX)

Baron Funds, an asset management firm, published its “Baron Discovery Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. In what turned out to be a challenging first quarter, Baron Discovery Fund (the “Fund”) decreased 16.30% (Institutional Shares), which was 3.67% below the Russell 2000 Growth Index (the “Benchmark”). Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron Discovery Fund mentioned Trex Company, Inc. (NYSE:TREX) and explained its insights for the company. Founded in 1996, Trex Company, Inc. (NYSE:TREX) is a Winchester, Virginia-based boarding company with a $6.3 billion market capitalization. Trex Company, Inc. (NYSE:TREX) delivered a -58.54% return since the beginning of the year, while its 12-month returns are down by -43.68%. The stock closed at $55.98 per share on June 14, 2022.

Here is what Baron Discovery Fund has to say about Trex Company, Inc. (NYSE:TREX) in its Q1 2022 investor letter:

“Trex Company, Inc. (NYSE:TREX)underperformed during the first quarter. Trex is a leading manufacturer of composite decking materials for the U.S. residential market. Underperformance was driven by valuation multiple compression amid concerns that demand for Trex’s products would slow following two years of outsized growth. In addition, Trex provided full-year margin guidance that fell slightly below expectations as a result of ongoing investments in new capacity. We remain bullish on Trex’s long-term prospects as the brand and share leader in composite decking, an underpenetrated category that we believe will continue to take share versus wood for many years to come.”

RomanR/Shutterstock.com

Our calculations show that Trex Company, Inc. (NYSE:TREX) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Trex Company, Inc. (NYSE:TREX) was in 38 hedge fund portfolios at the end of the first quarter of 2022, compared to 28 funds in the previous quarter. Trex Company, Inc. (NYSE:TREX) delivered a -23.15% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on Trex Company, Inc. (NYSE:TREX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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