Another All-Time High for the S&P 500

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Texas Instruments (Photo: The Dallas Morning News) At the same time, United Airlines jumped more than 5% on a strong 4th quarter but expected a 1st quarter loss due to the grounding of Boeing 727 Max 9 airplanes. These disappointing earnings reports may indicate that the economy is starting to slow down. But it doesn’t apply to all sectors yet. Netflix spiked more than 7% after topping estimates for subscriber growth. In other words, tech companies keep growing while many other sectors are struggling. For example, Nvidia’s stock skyrocketed by 20% this month alone while the small-cap Russell 2000 was down by more than 2%. Meaning? Big Tech earnings will be key to see whether their lofty valuations are justified. IBM, Tesla, and Intel will report today and tomorrow before many other companies release their earnings results next week. Moreover, we will receive the preliminary 4th quarter GDP data tomorrow and December’s personal consumption expenditures price index reading on Friday. All in all, tech earnings and inflation data will be critical to determine the market’s future direction. - “Corporate earnings is going to be probably the most important thing we see this quarter other than what, ultimately, GDP and inflation looks like,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth. - “I talked a lot last year about the health of the consumer. And I think that is going to be what comes most into focus at the first part of this year.” Dominant Brand In A Lucrative Industry Is Dirt-Cheap And Offers A Rare Buying Opportunity Today’s Stock Pick: Trex Company, Inc ([TREX](~/AASl5QA~/RgRnk7ecP0R4aHR0cHM6Ly9kYXNoYm9hcmQudHJhZGVhbGdvLmNvbS9jb21wYW55L1RSRVg_X2t4PWlhVjNrQ0RNYjF3X3JyZWFJY21Zelg3R2tzY1lHRmFxWHBob0lIOXFaX3NRZVFVTjBvYTV1czAxUmw1cUQ2RGMuWTlpRE5aVwNzcGNCCmWunDKxZZhZmKJSG3RyaXN0cmFtYmFsZHdpbjg4QGdtYWlsLmNvbVgEABA4Iw~~)) Trex offers perhaps the most exciting trend in the home improvement industry. Listen, we’re trying to go green in everything. And wood decks would require a lot of trees, which bucks the trend of sustainability. What’s more, wood decks are painful to maintain. Wood will rot, warp, and splinter. And you’ll need to paint or stain wood seasonally. And eventually, it will fade due to termites and age. Anybody who owns a wood deck will remember these splinters that can pierce your fingers or feet. Trex is leading the revolution of using materials that are 95% recycled and reclaimed, like plastic bags, to create high-quality, attractive decks. In fact, they often look better than wood. And best of all, it requires virtually zero maintenance (except for regular cleaning) and lasts for 25+ years. (Source: Trex) And you can see how composite materials last longer than wood in the photo below: (Photo: timbertech.com) As a result, consumers are switching to composite decks more than ever. Composite has about 24% of the market share in decking, as of the most recent quarter. And composite continues to take about 2% share from wood every year. Trex CEO Bryan Fairbanks believes that composite would eventually hold about 45-50% of the market share: - “...we estimate composites account for approximately 25% of the total decking market but expect it will reach 45% to 50% in the future.” Each 1% market share would add ~$80 million to annual composite sales. Using the average of 2% growth, the composite market could grow by $160 million each year from taking the market share from wood alone. (Source: Trex) Cost comparison: Wood is cheaper upfront versus composite deck. The cheapest version by Trex costs about two times higher than wood. More premium versions would cost 3x or 4x more. You can see the comparison in the chart below: (Source: Trex) However, the return on investment will break even within three years and the long-term comparison is simply a no-brainer in favor of composite deck. It lasts longer and requires far less maintenance. Lifetime economics of Trex’s middle-tier version would save consumers two times more money than wood deck: (Source: Trex) Now, let’s look at how composite decks look. You’ll see how attractive they look. The grain patterns are similar to wood and composite decks can maintain their looks for decades: (Source: Trex) Trex’s composite decks sure look good, don’t you agree? Best of all, Trex thoroughly dominates this niche in composite decks. The company commands more than 60% of category web traffic through its sites – trex.com and decks.com. And it won multiple prestigious awards for top products, brand awareness, sustainability, fastest-growing business, and best mid-size companies. For example, Forbes named Trex as 12th best mid-size company in 2022: (Source: Trex) And the company is growing two times faster than the remodeling market: (Source: Trex) Sales growth: By now, you have an intuition that Trex’s sales growth is phenomenal, right? Indeed, it is. Sales grew by 14% CAGR since 2017: (Source: Trex) The stock just got cheaper: With its incredible financials, dominant market share, and surging growth, Trex’s stock is unsurprisingly popular. But thanks to the market correction, the stock price is now at the buying level. The price was at $140 in December, and it is now trading at $81 a share! There’s no doubt about it – Trex is a rare company that is in the right trend, dominates its niche, and holds pricing power. If you buy and hold for a decade, you are sure to come out ahead. Bottom line: The decking industry is going through a massive change, and Trex is at the forefront of this industry. It is known as the “Apple of the composite deck,” where its products are generally accepted as the highest-quality ones in the market. So, grab the high-quality stock for your portfolio.   [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](~/AASl5QA~/RgRnk7ecP0TQaHR0cHM6Ly9nZXQudHJhZGVhbGdvbWFpbC5jb20vd2ViaW5hci10cmFkZS1hbGdvLWxpdmUtc2Vhc29uLTgtZGVtaW8vP3V0bV9zb3VyY2U9R21haWwmdXRtX2NhbXBhaWduPURhaWx5QnVsbGV0aW4mdXRtX2lkPVByb21vQm90dG9tJl9reD1pYVYza0NETWIxd19ycmVhSWNtWXpYN0drc2NZR0ZhcVhwaG9JSDlxWl9zUWVRVU4wb2E1dXMwMVJsNXFENkRjLlk5aUROWlcDc3BjQgplrpwysWWYWZiiUht0cmlzdHJhbWJhbGR3aW44OEBnbWFpbC5jb21YBAAQOCM~)     © All Rights Reserved, Trade Alliance [Unsubscribe](~/AASl5QA~/RgRnk7ecP0SpaHR0cHM6Ly9tYW5hZ2Uua21haWwtbGlzdHMuY29tL3N1YnNjcmlwdGlvbnMvdW5zdWJzY3JpYmU_YT1ZOWlETlomYz0wMUhLV1M1RzU3UFdDMlJKS0Y4SlI0UjRYMiZrPWJhODgyNDEzMzMyN2U1MzYzNjljZDQxNmQ3YmQ1MmFhJm09MDFITVkyRkMwWjhXNkNQMVQ5NEFESFBYMDcmcj0zNmpxbVNYcFcDc3BjQgplrpwysWWYWZiiUht0cmlzdHJhbWJhbGR3aW44OEBnbWFpbC5jb21YBAAQOCM~) | [Manage Preferences](~/AASl5QA~/RgRnk7ecP0SkaHR0cHM6Ly9tYW5hZ2Uua21haWwtbGlzdHMuY29tL3N1YnNjcmlwdGlvbnMvdXBkYXRlP2E9WTlpRE5aJmM9MDFIS1dTNUc1N1BXQzJSSktGOEpSNFI0WDImaz1iYTg4MjQxMzMzMjdlNTM2MzY5Y2Q0MTZkN2JkNTJhYSZtPTAxSE1ZMkZDMFo4VzZDUDFUOTRBREhQWDA3JnI9MzZqcW1TWHBXA3NwY0IKZa6cMrFlmFmYolIbdHJpc3RyYW1iYWxkd2luODhAZ21haWwuY29tWAQAEDgj)