Trex Company (TREX) Outperformed on Better Sentiment Around Macro Conditions

The London Company, an investment management company, released “The London Company SMID Cap Strategy” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund returned 8.5% gross (8.3% net) compared to a 5.2% return for the Russell 2500 Index. Stock selection was positive for the fund’s performance which was offset by headwinds from sector exposure. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

The London Company SMID Cap Strategy highlighted stocks like Trex Company, Inc. (NYSE:TREX) in the second quarter 2023 investor letter. Headquartered in Winchester, Virginia, Trex Company, Inc. (NYSE:TREX) is a decking, railing, and outdoor living products and accessories manufacturer. On August 2, 2023, Trex Company, Inc. (NYSE:TREX) stock closed at $75.43 per share. One-month return of Trex Company, Inc. (NYSE:TREX) was 16.70%, and its shares gained 15.46% of their value over the last 52 weeks. Trex Company, Inc. (NYSE:TREX) has a market capitalization of $7.894 billion.

The London Company SMID Cap Strategy made the following comment about Trex Company, Inc. (NYSE:TREX) in its second quarter 2023 investor letter:

“Trex Company, Inc. (NYSE:TREX) – TREX outperformed in Q2, reflecting better sentiment around macro conditions. Meanwhile, operations are tracking a bit better than expected. We initiated a position in the stock in late 2022, after the valuation had adjusted to reflect slower demand and de-stocking in the channel. Fundamentals do not appear to have deteriorated further, and the company has done a good job of controlling the things it can control. TREX entered the slowdown with a strong balance sheet, and responded quickly with cost reductions to protect margin and opportunistic share repurchases. We believe the company’s position as the market leader in composite decking is stable, and we believe that the penetration trend driving the growth of the category remains intact. We continue to view TREX as a solid business that is likely to get stronger over time.”

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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, 30 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of first quarter which was 34 in the previous quarter.

We discussed Trex Company, Inc. (NYSE:TREX) in another article and shared SouthernSun Smid Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 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.