Is Trex Company (TREX) Trading at an Attractive Valuation?

Mairs & Power, an investment advisor, released the third-quarter 2025 investor letter for the “Mairs & Power Small Cap Fund.” A copy of the letter can be downloaded here. The market’s concentration persists in 2025, with a few dominant mega-cap stocks tied to artificial intelligence (AI) driving most of the favorable outcomes. The fund returned 2.06% in the first nine months of 2025. The fund underperformed the benchmark Russell 2000 Total Returns (TR) Index, which was up 10.39%, the S&P Small Cap 600 TR, which rose 4.24% and the Morningstar U.S. Fund Small Blend, which returned 6.15%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Mairs & Power Small Cap Fund highlighted 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 for Trex Company, Inc. (NYSE:TREX) was 9.53%, and its shares lost 54.84% over the last 52 weeks. On December 10, 2025, Trex Company, Inc. (NYSE:TREX) stock closed at $35.39 per share, with a market capitalization of $3.796 billion.

Mairs & Power Small Cap Fund stated the following regarding Trex Company, Inc. (NYSE:TREX) in its third quarter 2025 investor letter:

“During the third quarter of 2025, the Fund initiated a position in Patrick Industries and Trex Company, Inc. (NYSE:TREX). Trex is a leading manufacturer of wood alternative composite decking, railing, and outdoor living goods that combines recycled plastic and reclaimed wood to deliver durable, low-maintenance outdoor building products. Trex has a renowned brand, and has benefited from a secular shift to composite materials away from wood. Trex stock had been weak, after concerns regarding slowing housing industry due to elevated rates, and was at a valuation we viewed as attractive.”

Trex Company, Inc. (TREX): Among Mid- And Large-Cap Stocks Insiders Are Buying After Trump’s Tariff Rollout

Trex Company, Inc. (NYSE:TREX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of the third quarter, the same as in the previous quarter. 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 the list of worst performing stocks to invest in on the dip. In addition, please check out our hedge fund investor letters Q3 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.