Conestoga Capital Advisors, an asset management company, released its “Small Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The second quarter of 2024 may be regarded as a time of moderation. Economic indicators largely reflected slowing growth and easing inflation. Equity markets are also driven by the moderation theme. Large-cap stocks, as measured by the S&P 500, rose 3.9% in the second quarter, however, small-cap stocks lagged again, with the Russell 2000 Index declining -3.3% and the Russell 2000 Growth Index declining -2.9%. Conestoga Small Cap Composite fell -5.59% in the second quarter compared to -2.92% for the Russell 2000 Growth Index. Stock selection was the major reason for the underperformance of the portfolio relative to the index. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
Conestoga Capital Advisors highlighted stocks like Trex Company, Inc. (NYSE:TREX), in the second quarter 2024 investor letter. 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 -26.30%, and its shares lost 15.20% of their value over the last 52 weeks. On August 13, 2024, Trex Company, Inc. (NYSE:TREX) stock closed at $61.42 per share with a market capitalization of $6.677 billion.
Conestoga Capital Advisors stated the following regarding Trex Company, Inc. (NYSE:TREX) in its Q2 2024 investor letter:
“Trex Company, Inc. (NYSE:TREX): TREX is the market share leader in composite decking and railing and has been a long-term holding of Conestoga. Despite excellent 1Q24 results, TREX stock sold off during the quarter given some macro concerns and a few decking survey’s that showed a slightly weakening decking market. We remain bullish on TREX given the continued consumer preference for composites over wood, as well as some exciting new products from TREX such as their Lineage Decking which has heat mitigation technology.”
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 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of the first quarter which was 32 in the previous quarter. Trex Company, Inc. (NYSE:TREX) reported net sales of $376 million in the second quarter, up 6% from Q2 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 discussed Trex Company, Inc. (NYSE:TREX) and shared The London Company SMID Cap Strategy’s views on the company. Conestoga Capital Advisors’ Q1 2024 letter highlighted Trex Company, Inc.’s (NYSE:TREX) performance, noting that it rallied beyond expectations. In addition, please check out our hedge fund investor letters Q2 2024 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.
