Is Trex Company (TREX) an Undervalued Stock?

Baron Funds, an investment management company, released its “Baron Real Estate Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund declined 4.86% (Institutional Shares) compared to a 4.99% decline for its primary benchmark, the MSCI USA IMI Extended Real Estate Index. At the same time, the fund outperformed the MSCI US REIT Index, which fell 10.28% in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2022.

Baron Funds highlighted stocks like Trex Company, Inc. (NYSE:TREX) in the Q3 2022 investor letter. Headquartered in Winchester, Virginia, Trex Company, Inc. (NYSE:TREX) is a decking, railing, and outdoor living products and accessories distributor. On November 18, 2022, Trex Company, Inc. (NYSE:TREX) stock closed at $44.81 per share. One-month return of Trex Company, Inc. (NYSE:TREX) was -5.58% and its shares lost 66.30% of their value over the last 52 weeks. Trex Company, Inc. (NYSE:TREX) has a market capitalization of $4.917 billion.

Baron Funds made the following comment about Trex Company, Inc. (NYSE:TREX) in its Q3 2022 investor letter:

“Trex Company, Inc. (NYSE:TREX) is the largest manufacturer (#1 by market share) of wood-alternative (composite) outdoor decking and railing in the U.S. The company has the most well-regarded consumer brand, an exclusive distribution footprint, and proprietary recycling expertise that gives it cost advantages. Following a nearly 70% decline in its shares in the first nine months of 2022, Trex is valued at a steep discount to its historical range of valuation multiples.”

Railing, stairs

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Trex Company, Inc. (NYSE:TREX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX)  at the end of the third quarter which was 36 in the previous quarter.

We discussed Trex Company, Inc. (NYSE:TREX) in another article and shared the best stocks to buy under $50. In addition, please check out our hedge fund investor letters Q3 2022 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.