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Funding Thesis
The market has not been type to Trex (NYSE:TREX) in 2022. The market chief in compowebsite decking is down 53% YTD, As in contrast with the S&P 500’s 13% slide, As a Outcome of of a deteriorating housing market spurred by rising Costs of curiosity. Trex’s non-GAAP P/E now stands at 27.4 As in contrast with its 5-YR common of 41.9. Trex is A Sort of corporations that persistently commerces at a premium, Simply like Costco (Value) and Ulta Magnificence (ULTA). For my half, Trex deserves to commerce at a premium Since the agency supplys a superior, sustainable product. With ESG now a prime precedence for consumers and producers alike, prolonged-time period buyers might view Trex’s current market woes as An alternative To choose up shares at A discount to historic valuations.
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A Superior Product
Trex manuactualityures compowebsite decking primarily Utilized in residential housing. Their compowebsite decking is An alternate selection to wooden and, wright hereas Costlier, supplys a compelling worth proplace over its lifetime.
Anyone who has ever had a wooden deck can attest to The very actuality They might be a ache. Wood decks require routine upmaintain To maintain them wanting respectable and To sprime rotting. This consists of power-washing, staining, waterproofing, and inevitable alternative. Lots of these duties Are typically annual. Trex estimates that, over a 25-yr lifetime, their compowebsite decking will truly Forestall money. Even Trex’s Costliest product, Trex Transcend, wins in …….
Source: https://seekingalpha.com/article/4529573-trex-riding-esg-tailwinds-continued-growth