Madison Asset Management Liquidates Its $98 Million Trex Position

Company Overview - Trex is a leading provider of composite decking and outdoor living solutions, serving both residential and commercial markets across the United States [2] - The company maintains its market presence through a diversified distribution network and strong retail partnerships, focusing on innovative, low-maintenance products [2] Recent Performance - As of February 5, 2026, Trex shares were priced at $43.02, reflecting a 38.6% decline over the prior year and underperforming the S&P 500 by 52 percentage points [3] - Madison Asset Management sold all 1,893,081 shares of Trex during the fourth quarter of 2025, with an estimated transaction value of $97.82 million [4] Sales and Growth Potential - Despite recent volatility, Trex grew sales by 25% in its latest quarter and saw a 50% increase in requests for samples and website visits [5] - The company generated 25% of its Q3 sales from new products, indicating a strong innovation pipeline [5] Valuation Metrics - Trex is trading with an EV-to-EBITDA ratio of 15, compared to its decade-long average of 23, suggesting it remains reasonably valued [6] - The company has achieved a 12% annual sales growth over the last ten years, reinforcing its position as a leader in its niche [6] Market Position - Trex remains the number one player in the composite products niche, despite challenges in the broader housing market [5][6]