Trex Company, Inc. (NYSE:TREX) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. TREX has experienced a decrease in enthusiasm from smart money of late. There were 16 hedge funds in our database with TREX holdings at the end of the previous quarter.
If you’d ask most market participants, hedge funds are assumed to be underperforming, old investment tools of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the elite of this group, around 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total capital, and by paying attention to their top equity investments, we have identified a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are many reasons for an executive to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if you understand what to do (learn more here).
Now, we’re going to take a peek at the key action encompassing Trex Company, Inc. (NYSE:TREX).
What have hedge funds been doing with Trex Company, Inc. (NYSE:TREX)?
At Q1’s end, a total of 14 of the hedge funds we track were bullish in this stock, a change of -13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Trex Company, Inc. (NYSE:TREX), worth close to $17 million, comprising 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, managed by Jim Simons, which held a $9.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Alexander Mitchell’s Scopus Asset Management, Malcolm Fairbairn’s Ascend Capital and Van Schreiber’s Bennett Lawrence Management.
Due to the fact that Trex Company, Inc. (NYSE:TREX) has faced a declination in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that slashed their full holdings at the end of the first quarter. Interestingly, Israel Englander’s Millennium Management sold off the largest investment of all the hedgies we key on, totaling close to $4.1 million in stock.. Mike Vranos’s fund, Ellington, also sold off its stock, about $1.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds at the end of the first quarter.
Insider trading activity in Trex Company, Inc. (NYSE:TREX)
Insider buying is particularly usable when the company in question has experienced transactions within the past half-year. Over the last six-month time period, Trex Company, Inc. (NYSE:TREX) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Trex Company, Inc. (NYSE:TREX). These stocks are AAON, Inc. (NASDAQ:AAON), Griffon Corporation (NYSE:GFF), Universal Forest Products, Inc. (NASDAQ:UFPI), Headwaters Inc (NYSE:HW), and Apogee Enterprises, Inc. (NASDAQ:APOG). All of these stocks are in the general building materials industry and their market caps are similar to TREX’s market cap.