Our first recommendation today is a building product supplier that recently reported quarterly results that beat estimates for both revenues and earnings. Our second idea is some nice profit-taking.
Buy: Trex Company, Inc. (TREX)
From 2 for 1 Stock Split Newsletter
TREX Company was one of the original manufacturers of the composite decking that has become the popular alternative to wood for outdoor decks and railings. Its decking is made primarily from recycled plastics and makes so much sense as concern for the environment becomes more and more widespread.
The stock is not a bargain, with a PE ratio in the 40’s, and the company does not pay a dividend, definitely not to my liking.
However, with earnings growing at over 30%/year over the last five years, it’s understandable why the PE is where it is, and the good news is TREX is quite profitable with great returns on investment, equity, and assets. The company has no long-term debt indicating a super conservative approach to business that should reward us over the next few years.
Neil Macneale, 2 for 1 Stock Split Newsletter, 2-for-1.com, 408-210-6881, August 2020