Trex Co., Inc. (TREX) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Simpson Manufacturing Co., Inc.

The AZEK Co., Inc.

UFP Industries, Inc.

Armstrong World Industries, Inc.

Trex Co., Inc.

Mohawk Industries, Inc.

Louisiana-Pacific Corp.

Griffon Corp.

GMS, Inc.

Beacon Roofing Supply, Inc.

JELD-WEN Holding, Inc.

Why is Trex Co., Inc. ?

High Management Efficiency with a high ROCE of 33.52%

Company has a low Debt to Equity ratio (avg) at times

Poor long term growth as Net Sales has grown by an annual rate of 7.67% and Operating profit at 2.92% over the last 5 years

The company has declared Negative results for the last 3 consecutive quarters

INTEREST(9M) At USD 0.08 MM has Grown at inf%
NET PROFIT(9M) At USD 146.12 MM has Grown at -26.21%
ROCE(HY) Lowest at 19.81%

With ROCE of 19.73%, it has a very expensive valuation with a 5.85 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -55.03%, its profits have fallen by -21.9%

Below par performance in long term as well as near term

Along with generating -55.03% returns in the last 1 year, the stock has also underperformed S&P 500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Trex Co., Inc. should be less than 10%
Overall Portfolio exposure to Paper, Forest & Jute Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Paper, Forest & Jute Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Trex Co., Inc. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Trex Co., Inc.

-55.03%

-1.10

52.90%

S&P 500

13.22%

0.65

20.20%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

7.67%

EBIT Growth (5y)

2.92%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

0.74

Net Debt to Equity (avg)

0.49

Sales to Capital Employed (avg)

1.17

Tax Ratio

26.28%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

33.52%

ROE (avg)

30.21%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

8.25

EV to EBIT

29.67

EV to EBITDA

24.64

EV to Capital Employed

5.85

EV to Sales

7.12

PEG Ratio

Dividend Yield

ROCE (Latest)

19.73%

ROE (Latest)

21.73%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bearish

OBV

No Trend

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

NET SALES(Q)

Highest at USD 387.8 MM

PRE-TAX PROFIT(Q)

At USD 102.47 MM has Grown at 52.8%

NET PROFIT(Q)

At USD 75.91 MM has Grown at 53.54%

-10What is not working for the Company

INTEREST(9M)

At USD 0.08 MM has Grown at inf%

NET PROFIT(9M)

At USD 146.12 MM has Grown at -26.21%

ROCE(HY)

Lowest at 19.81%

RAW MATERIAL COST(Y)

Grown by 8.87% (YoY

DEBTORS TURNOVER RATIO(HY)

Lowest at 4.02 times

Here's what is working for Trex Co., Inc.

Net Sales

At USD 387.8 MM has Grown at 38.77%

over average net sales of the previous four periods of USD 279.45 MM

MOJO Watch

Near term sales trend is very positive

Net Sales (USD MM)

Net Sales

Highest at USD 387.8 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (USD MM)

Pre-Tax Profit

At USD 102.47 MM has Grown at 52.8%

over average net sales of the previous four periods of USD 67.06 MM

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (USD MM)

Net Profit

At USD 75.91 MM has Grown at 53.54%

over average net sales of the previous four periods of USD 49.44 MM

MOJO Watch

Near term Net Profit trend is positive

Net Profit (USD MM)

Depreciation

Highest at USD 15.81 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for Trex Co., Inc.

Interest

At USD 0.08 MM has Grown at inf%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Debtors Turnover Ratio

Lowest at 4.02 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Raw Material Cost

Grown by 8.87% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales