The AZEK Company (AZEK) Surged After Acquisition Announcement

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund returned -9.41% (gross) and -9.64% (net), compared to a -11.12% return for the Russell 2000 Growth Index. There was a broad positive sentiment in the market at the beginning of 2025. Expectations for a pro-business and soft regulatory environment lifted global markets in January. However, delays and uncertainties surrounding U.S. policies led to a significant downturn in March. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as AZEK Company Inc. (NYSE:AZEK). The AZEK Company Inc. (NYSE:AZEK) designs, manufactures, and distributes building products for industrial, commercial, and residential sectors. The one-month return of The AZEK Company Inc. (NYSE:AZEK) was 5.04%, and its shares gained 15.06% of their value over the last 52 weeks. On June 23, 2025, The AZEK Company Inc. (NYSE:AZEK) stock closed at $51.72 per share, with a market capitalization of $7.44 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding The AZEK Company Inc. (NYSE:AZEK) in its Q1 2025 investor letter:

“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, equipment enabling automation & efficiency improvements, or essential infrastructure services. The AZEK Company Inc. (NYSE:AZEK), a designer and manufacturer of wood alternative building products, edged forward by 3%. In March, the company announced they entered into a definitive agreement to be acquired by Australia-based James Hardie Industries in a cash and stock deal.”

Why The AZEK Company Inc. (AZEK) Went Up Last Week?

A team of architects and engineers standing in front of a mid-construction commercial building.

The AZEK Company Inc. (NYSE:AZEK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held The AZEK Company Inc. (NYSE:AZEK) at the end of the first quarter, which was 36 in the previous quarter. While we acknowledge the potential of The AZEK Company Inc. (NYSE:AZEK) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of AZEK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.