Stockchase Opinions

C. Kim Goodwin Trex Company Inc. TREX-N TOP PICK Jun 25, 2004

Will go up because the shorts will have to be covering at some point. A low-cost producer in a fast-growing market.
$37.490

Stock price when the opinion was issued

contractors
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BUY ON WEAKNESS
They make faux-wood decking and railing. He's long liked it. It rallied until 3 weeks ago when the current rotation kicked in. Wall Street is fickle. TREX has had so much demand they are building another factory. And last week they reported 40% revenue growth. But the stock has fallen 18% from highs after management released weaker guidance.
BUY
She's owned this for a while. It's down 40% from highs, so attractive now. She expects home repairs to continue. She loves the housing-adjacent trade.
BUY
There is a severe housing shortage. A nice way to play housing this is in the repair side. Rising rates will prevent homeowners from moving into new homes and they will stay in place. So, this will drive home renovations. We need to add more supply to homes in the next 12-18 months, but until then there will be pressure on this space.
HOLD
Housing-adjacent stocks are a tough space. TREX does mixed-composite decking, which is more expensive decking than lumber. They warned of lower capex for the second-half of 2022 based in weakening inventory demand. In the long-term, this is a growth driver within housing-adjacent stocks. She added to this earlier this year and will watch for normalization of inventories in the professionals channel. Hold on.
BUY ON WEAKNESS

Rising interest rates have hurt the housing sector. This includes TREX. He's long liked this company for its fine products. It's had a great year until early August. Since that peak, it's fallen over 15%. They had a great investors day a week ago and forecast a superb second half of 2023. When the Fed stops hiking interest rates, TREX will spike.