Jim Cramer Recommends Selling These 5 Stocks

1. Trex Company, Inc. (NYSE:TREX)

Number of Hedge Fund Holders: 28

Trex Company, Inc. (NYSE:TREX) is a Virginia-based company that makes wood-alternative composite decking, railing, and other outdoor items made from recycled materials. The stock is down 32% over the last six months. Jim Cramer recently said that Trex Company, Inc. (NYSE:TREX) failed to perform in their earnings and that’s why he’d avoid the stock.

“… the earnings per share for the actual quarter was terrible. So the answer is ‘no thank you.’”

For the fourth quarter, Trex Company, Inc. (NYSE:TREX)’s EPS came in at $0.55, beating the estimates by $0.02. Revenue in the period jumped 33% to reach $304 million, beating the consensus by $1.36 million.

Hedge funds are also loading up on the stock. At the end of the fourth quarter, 28 funds had stakes in Trex Company, Inc. (NYSE:TREX), compared to 21 funds a quarter earlier. Charles Montanaro’s Montanaro Asset Management is a leading shareholder in the company with a $69.5 million stake.

Wasatch Global Investors, an investment management firm, published its “Wasatch Core Growth Fund” fourth quarter 2021 investor letter and mentioned Trex Company, Inc. (NYSE:TREX). Here‘s what the fund said:

“Trex Co., Inc. (TREX) was also a large contributor. The company is a manufacturer and seller of high-performance, low-maintenance composite (non-wood) decking and accessories. Trex has continued to take market share from traditional suppliers of wood products, which have shorter lifespans and require more upkeep than composites. While the stock price can be volatile, the key factor for us is that the company has excellent prospects for intermediate- to long-term growth. In other words, we believe the Trex story is more about market-share dominance than about cyclical demand. Recently, the company reported strong growth in revenues, margins and earnings. Moreover, Trex has completed a major expansion of facilities to meet higher demand, and an even larger expansion has been announced. These expansions increase our confidence that the size of the market for composite products will grow significantly and that Trex will continue to take share for years on end.”

You can also take a look at Warren Buffett’s Performance in 2021: 10 Best Stock Picks and 10 ESG Dividend Stocks to Buy. 

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