Madison Investments, an investment advisor, released its “Madison Mid Cap Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund (Class I) decreased 4.15% compared to the 3.40% decrease for the Russell Midcap Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Madison Mid Cap Fund highlighted stocks such as Trex Company, Inc. (NYSE:TREX). Trex Company, Inc. (NYSE:TREX) manufactures and distributes composite decking, railing, and outdoor living products and accessories. The one-month return of Trex Company, Inc. (NYSE:TREX) was -10.98%, and its shares lost 38.76% of their value over the last 52 weeks. On April 22, 2024, Trex Company, Inc. (NYSE:TREX) stock closed at $55.22 per share, with a market capitalization of $5.921 billion.
Madison Mid Cap Fund stated the following regarding Trex Company, Inc. (NYSE:TREX) in its Q1 2025 investor letter:
“We added two new investments in the quarter, Kinsale Capital Group and Trex Company, Inc. (NYSE:TREX). Trex is the world’s largest manufacturer of composite decking and railing. Historically, decking was made mostly of wood materials, but decking made from composite materials have steadily taken market share over the past two decades due to its superior durability and lower maintenance needs. Trex is by far the dominant brand in composites, and its scale has allowed it to build significant cost and distribution advantages. The company should benefit from the ongoing conversion of wood decks, as only around a quarter of decks today are composite. The management team is seasoned and well-regarded, and the company has a clean balance sheet, high returns on capital, and good free cash flow generation. The stock has traded down recently as the housing market remains stubbornly weak.”
A home exterior with a deck and railing crafted with products from the company.
Trex Company, Inc. (NYSE:TREX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of the fourth quarter which was 35 in the previous quarter. Trex Company, Inc. (NYSE:TREX) net sales were $168 million in the fourth quarter of 2024, a decrease of 14% compared to $196 million in Q4 2023. While we acknowledge the potential of Trex Company, Inc. (NYSE:TREX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered Trex Company, Inc. (NYSE:TREX) and shared Polen U.S. Small Company Growth Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.