Polen Capital, an investment management company, released its “Polen U.S. Small Company Growth Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. According to the Russell 2000 Growth Index, U.S. small cap growth stocks experienced a 1.7% increase in the fourth quarter and a 15% rise for the year 2024. In what proved to be a tumultuous quarter, small caps surged over 10% following the U.S. Presidential election in November, but nearly all of those gains were lost in December as the U.S. Federal Reserve indicated a more gradual reduction in interest rates expected in 2025. In the fourth quarter, the fund delivered 5.09% gross, and 4.73% net of fees compared to a 1.70% return for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
In its fourth quarter 2024 investor letter, Polen U.S. Small Company Growth Strategy emphasized 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 Trex Company, Inc. (NYSE:TREX) was 9.79%, and its shares lost 19.97% of their value over the last 52 weeks. On February 5, 2024, Trex Company, Inc. (NYSE:TREX) stock closed at $72.35 per share, with a market capitalization of $7.752 billion.
Polen U.S. Small Company Growth Strategy stated the following regarding Trex Company, Inc. (NYSE:TREX) in its Q4 2024 investor letter:
“During the quarter, we initiated positions in four new investments: Willscot Holdings, Trex Company, Inc. (NYSE:TREX), Fabrinet, and Belden. We also added to several existing positions.
Trex is the market leader in composite decking, uniquely positioned to benefit from rising demand for sustainable building materials and outdoor living spaces. Trex’s operational discipline, pricing power, and environmental differentiation support strong market share gains from wood alternatives. Its long-term growth is underpinned by robust consumer trends and secular tailwinds. We already own Trex in our U.S. SMID Company Growth Portfolio and decided to initiate a new position here, as we believe the stock is attractively priced, with fundamentals appearing to have bottomed likely to inflect positively.”
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, 35 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of the third quarter which was 36 in the previous quarter. Trex Company, Inc. (NYSE:TREX) net sales were $234 million in the third quarter of 2024, a decrease of 23% compared to $304 million in Q3 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 Conestoga Capital Advisors’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.