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

Core Insights - The Mairs & Power Small Cap Fund reported a return of 2.06% in the first nine months of 2025, underperforming the benchmark Russell 2000 Total Returns Index, which increased by 10.39% [1] - The market remains concentrated in 2025, with a few dominant mega-cap stocks related to artificial intelligence driving most favorable outcomes [1] Company Highlights - Trex Company, Inc. (NYSE:TREX) is a manufacturer of composite decking and outdoor living products, with a one-month return of 9.53% but a significant decline of 54.84% over the last 52 weeks [2] - As of December 10, 2025, Trex's stock closed at $35.39 per share, with a market capitalization of $3.796 billion [2] - The Mairs & Power Small Cap Fund initiated a position in Trex during the third quarter of 2025, viewing its valuation as attractive amid concerns about a slowing housing industry [3] Investment Sentiment - Trex Company, Inc. was held by 41 hedge fund portfolios at the end of the third quarter, indicating stable interest among institutional investors [4] - Despite Trex's potential, the sentiment suggests that certain AI stocks may offer greater upside potential and less downside risk compared to Trex [4]