ClearBridge Investments, an investment management firm, published its “Sustainability Leaders Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Sustainability Leaders Strategy underperformed its Russell 3000 Index benchmark during the first quarter. On an absolute basis, the Strategy had gains in five of 10 sectors in which it was invested (out of 11 sectors total). You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Trex Company, Inc. (NYSE: TREX), and shared their insights on the company. Trex Company, Inc. is a Winchester, Virginia-based wood-alternative composite decking, railing manufacturer that currently has an $11.1 billion market capitalization. Since the beginning of the year, TREX delivered a 15.52% return, extending its 12-month gains are to 54.80%. As of June 04, 2021, the stock closed at $96.71 per share.
Here is what ClearBridge Investments has to say about Trex Company, Inc. in its Q1 2021 investor letter:
“Just as the new home market has been hopping amid low interest rates and the greater need for space, the market for home improvement has also been robust for similar reasons. Decks have been perfect places for safe social gatherings during the pandemic, and ClearBridge portfolio holding Trex has been meeting demand with its composite decking made from recycled wood fibers and plastic waste.
Trex’s high-performance decking portfolio is made using more than 95% recycled content. Trex uses locally sourced reclaimed wood that would otherwise end up in landfills and so avoids cutting down trees to make its products. The recycled plastic film it uses comes from a variety of sources, including industrial shrink wrap, agricultural plastic sheeting and household plastic such as grocery and shopping bags. With the average 500-square foot composite Trex deck containing 140,000 recycled plastic bags, Trex is one of the largest plastic bag recyclers in the U.S. The company has also innovated ways of recycling dirtier plastics more likely to end up in landfills.
Trex has seen already strong demand get stronger during the pandemic; the company was sold out during much of 2020 and began expanding capacity across the U.S. to meet heightened demand. With lumber prices soaring amid the strong housing market, Trex’s composite decks are increasingly gaining share, especially in price-sensitive areas of the market, which bodes well for both the environment and shareholders.”
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Our calculations show that Trex Company, Inc. (NYSE: TREX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Trex Company, Inc. was in 23 hedge fund portfolios, compared to 30 funds in the fourth quarter of 2020. TREX delivered a 9.60% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
