Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net of fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile in the quarter. The “low quality” stocks rally persisted in the quarter, but at a slower pace compared to earlier quarters. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks like Trex Company, Inc. (NYSE:TREX). Trex Company, Inc. (NYSE:TREX) is a leading manufacturer of composite decking and railing products. On February 18, 2026, Trex Company, Inc. (NYSE:TREX) stock closed at $41.89 per share. One-month return of Trex Company, Inc. (NYSE:TREX) was -3.43%, and its shares are down 35.54% over the past twelve months. Trex Company, Inc. (NYSE:TREX) has a market capitalization of $4.493 billion.
Conestoga Capital Advisors stated the following regarding Trex Company, Inc. (NYSE:TREX) in its fourth quarter 2025 investor letter:
“Trex Company, Inc. (NYSE:TREX) manufactures composite decking and railing products for residential outdoor living markets. Performance was pressured in 4Q25 due to heightened competitive intensity, including increased pricing pressure and share competition from both established and lower priced alternatives, which weighed on volumes and margins. While the company maintains market leadership and a strong brand, the stock reflected investor concern around rising competition and the sustainability of near term profitability in a more crowded marketplace. We sold the stock in 4Q25.”
Trex Company, Inc. (NYSE:TREX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 41 hedge fund portfolios held Trex Company, Inc. (NYSE:TREX) at the end of the third quarter, the same as in the previous quarter. While we acknowledge the potential of Trex Company, Inc. (NYSE:TREX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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