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TREX: As Operating Efficiency Declines the “Add-Backs” and Management Nonsense Gets More Egregious

October 29th, 2024

“We haven't decided how we'll report that next year as of yet. If it's more helpful to the market, we'll show it that way..” - Bryan Fairbanks, CEO Trex Company, Inc.. 10/24/24. 3Q24...

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TREX: Have We Reached the “Enough Is Enough” Phase Yet? Earnings Could Fall Off a Cliff In the Next 18-24 Months

August 7th, 2024

Let’s put ourselves in the shoes of a TREX investor this morning.  You walked into the office yesterday thinking that TREX was one of the best secular growth stories in the industrial complex...

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TREX: Capacity Expansion Into a Slowing End-Market Amidst Heightened Marketing Spend – All Yours for 40x+

May 10th, 2024

“And the comment that I'm making has more do with the amount of capacity that all the wood/plastic composite manufacturers have added over the years, and there's a number of smaller participants in...

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TREX: Always Consider the Source -Trust this Management Team at Your Own Peril

October 31st, 2023

“I am feeling more positive about the Trex consumer today than I was feeling a year ago” Bryan Fairbanks, President and CEO. Trex Company, Inc. 10/30/23. 3Q23 Earnings Conf. Call Imagine having the unmitigated gall to...

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TREX: Amidst a Rising Tide of Alarming Questions, the Only Certainty Is That Estimates Are Going Lower

February 28th, 2023

I'm pleased to report that, as anticipated, the inventory recalibration was completed by year-end.  With good participation in the early buy season, we entered the year an upcoming season with inventory...

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TREX: Arrogance Is Fatal; Negative Estimate Revisions and Balance Sheet Questions Only Grow More Frequent from Here

November 1st, 2022

“You think you’re better than me?!!” Now former TREX employee to Bryan Fairbanks, President and CEO. Trex Company, Inc. (Probably) Imagine you worked for TREX at their...

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TREX: An Earnings Release and Outlook Hemmingway Would Love, Lowering Price Objective to $18

August 9th, 2022

“By all measures, Trex performed exceedingly well in the second quarter.” Bryan Fairbanks, President and CEO. Trex Company, Inc. 8/8/22. 2Q22 Earnings Conf. Call If you have a “Wall of Fame”...

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TREX: An "Econ 101" Driven Cat 5 Storm of Earnings Destruction Could Be Forming

June 24th, 2022

The attached report details our short thesis on TREX and outlines the feedback we received from our latest survey of decking products dealers.

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TREX: How Quickly Can the Channel Go From “Well Stocked” to “Stuffed”?

May 10th, 2022

TREX shares have declined nearly (-60%) thus far this year largely due to a widespread rerating of growth stocks following a near unprecedented increase in interest rates.  Remarkably, even after the enormous decline in TREX shares over...

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TREX: The Negative Estimate Revision Cycle Begins, In the Face of Unprecedented Capacity Expansion It Won’t End...

March 1st, 2022

“Fortunately, about half of the additional planned capacity has come online this month, with the balance expected by the end of January -- or excuse me, the end of April 2022. Our continuous...

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TREX: What is “Normal”? Coming to Grips with Reality at Trex

August 3rd, 2021

“Normal is the wrong name often used for average” Henry S. Haskins On TREX’s 2Q21 earnings conference call there were TWELVE references to “normal”, “normalization”, or “normalized”. ...

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TREX: Wood Pulp and Polyethylene Boards Don’t Grow to the Sky

February 23rd, 2021

TREX has an $11B+ market cap.  In a market full of excess, this singular data point has us shaking our heads day after day.  After all TREX manufactures composite decking from wood pulp and recycled plastic.  Based on the deluge of...

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TREX: The Four Things That Matter Now That the Setup for Shorts Has Improved Dramatically

November 3rd, 2020

There are better companies whose stocks have been absolutely destroyed over the past few weeks for posting the type of upside that TREX delivered in the third quarter.  Yes, the company generated strong sales growth and...

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TREX: The Unsustainable Trend? TREX Is Starting to Lose Market Share Just as the Industry Ramps Capacity Meaningfully

August 4th, 2020

The strength in sales of products related to the “home” since early March truly has been something to behold. This is particularly true of items that can be used outdoors or can improve the...

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TREX: And Now We Wait

May 5th, 2020

We’re going to keep it fairly short in this note.  Heading into the quarter, the magnitude of bullish sentiment surrounding TREX was simply baffling. Many analysts and investors appeared to be CONVINCED that strong feedback about decking related sales at Home Depot and Lowe’s...

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TREX: The Hard Realities for Composite Decking Manufacturers in a Post Covid-19 World

April 21st, 2020

Attached please find a report which outlines the feedback from a survey of decking dealers that we conducted over the first two weeks of April.

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TREX: The CEO Exits Stage Right at the Worst Possible Time; More Atrocious Earnings Quality from TREX

February 25th, 2020

“We estimate that composites account for 19% of the North American total decking market and that the enhanced products have further expanded our addressable market to about 60% of the overall decking market...

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TREX: Atrocious Earnings Quality, Continued Execution Issues, and Rising Competition, Did We Miss Anything?

October 29th, 2019

“The fact that I mentioned for the first time any guidance on the top line growth, I think is noteworthy. I think what I said was that we plan to have solid double-digit growth in 2020. The demand we've...

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TREX: PAA Research's Fall 2019 Decking Products Dealer Survey

October 22nd, 2019

Slowing sales trends as competition starts to heat up.

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TREX: “Can They Execute?” And Other Pressing Questions for TREX Management

July 30th, 2019

Admittedly, heading into the quarter we thought the revenue results and sales outlook for 3Q19 for TREX would be materially worse.  For the past few months the only consistent feedback we heard surrounding the company was that dealers...

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TREX: It’s April 29th, but for TREX 2019 Is Over, Competition Looms Even Larger Following the Company’s Execution...

April 30th, 2019

“We are very pleased with the current selling season, which will be for 2019 business. We had very good reception; we are going to take a lot of market share in the retail space with our...

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TREX: A Building Products Manufacturer with 40%+ Gross Margins Facing Rising Competition and Product Commoditization,...

March 28th, 2019

“Most decking contractors I know go for the cheapest brand. “ Regional Decking Products Distributor A few years ago, we introduced Acuity Brands as a short idea. At that time,...

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Current Ideas

KNSL

SELL/SHORT

$230

FRPT

SELL/SHORT

$55

BYON

LONG

$70

EXPI

SELL/SHORT

$4

HUSQ.B

SELL

$50

UFPI

SELL/SHORT

$45

TREX

SHORT

$18

PRDO

SELL/SHORT

$5

STRA

SELL/SHORT

$42

CWH

LONG

$75

CM

SELL/SHORT

$50

RY

SELL/SHORT

$50

ARC

LONG

$5.50

AYI

SHORT

$50

BIG

SHORT

$28

WWE

LONG

$65

XOXO

LONG

$37

RLGY

PAIR TRADE

$10

RDFN

PAIR TRADE

$30

BCO

LONG

$35

ING.PA

SHORT

$35

TRUP

SELL/SHORT

$10

CTC

SHORT

$101

ATGE

SHORT

$15

HCG.TO

SHORT

$0

RON.TO

SHORT

$9

ESI

SHORT

$0

BGG

PAIR - LONG BGG/SHORT TTC

25%

TTC

PAIR - LONG BGG/SHORT TTC

25%

Z

SHORT

$14.00

NA.TO

SHORT

$22

ZU

SHORT

$15

TRLA

SHORT

$20

MCRS

SHORT

$31

APOL

SHORT

$35

OPEN

SHORT

$30

KNL

PAIR - LONG KNL/SHORT MLHR

25%

CSGP

SHORT

$100

GCA

LONG

$8

IPSU

LONG

$20

MLHR

SHORT

$22

LOOP

PAIR - LONG CSGP/SHORT LOOP

40%

THQI

LONG

$35

WPO

SHORT

$275

COCO

SHORT

$0

HNI

SIG

RGR