Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for “Madison Mid Cap Fund”. A copy of the letter can be downloaded here. The Russell Midcap Index ended an incredibly successful three-year run with a full-year return of 10.6%, amounting to an annual increase of more than 14%. The market favored more volatile and speculative companies in 2025. This market environment poses challenges for the Madison Mid Cap portfolio, which is focused on high-quality, profitable businesses. Historically, this focus has supported long-term investment success, and the firm remains committed to it, is optimistic about the opportunities this year has presented, and has actively capitalized on them. Against this backdrop, the Fund decreased 1.2% in Q4 2025, lagging the Russell Midcap Index’s 0.2% increase. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Madison Mid Cap Fund highlighted stocks like Trex Company, Inc. (NYSE:TREX). Trex Company, Inc. (NYSE:TREX) is a leading manufacturer of composite decking and railing products. On March 10, 2026, Trex Company, Inc. (NYSE:TREX) stock closed at $37.26 per share. One-month return of Trex Company, Inc. (NYSE:TREX) was -13.96%, and its shares lost 31.08% over the past 52 weeks. Trex Company, Inc. (NYSE:TREX) has a market capitalization of $4.01 billion.
Madison Mid Cap Fund stated the following regarding Trex Company, Inc. (NYSE:TREX) in its fourth quarter 2025 investor letter:
“The bottom five detractors for the quarter were Trex Company, Inc. (NYSE:TREX), Brown & Brown, CDW, Floor & Décor, and Liberty Broadband. Trex shares declined meaningfully following their 3Q results and management’s outlook for 4Q. The company is facing headwinds from a slowing demand environment as well as an intensifying competitive environment.
We sold two holdings, Trex and Microchip Technology. Shortly after we purchased Trex, their largest competitor, Azek, was acquired by a large building products company, James Hardie. Hardie offered Azek greater scale for marketing and promoting their brands, and had a reputation for being very aggressive in going after market share and distribution agreements. Trex’s third quarter earnings report suggested that margins would be lower next year as they fend off this competitive threat. Additionally, demand has started to slow, providing another headwind to margins. We concluded that the competitive environment had meaningfully changed since our purchase and that Trex’s margins and earnings power may be lower for a prolonged period, thus we decided to sell.”
Trex Company, Inc. (NYSE:TREX) is not on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 48 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of the fourth quarter, up from 41 in the previous quarter. Trex Company, Inc. (NYSE:TREX) reported net sales of $161 million in Q4 2025, marking a decrease of 4% compared to $168 million in Q4 2024.While we acknowledge the risk and potential of Trex Company, Inc. (NYSE:TREX)) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Trex Company, Inc. (NYSE:TREX)) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Trex Company, Inc. (NYSE:TREX)) and shared SouthernSun Smid Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q4 2025 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.
