Conestoga Capital Advisors, an asset management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. At its September meeting, the Federal Reserve lowered the Federal Funds rate by 50 basis points due to weaker employment growth and moderate inflation. Equity markets welcomed the news, raising optimism for a soft landing in the U.S. economy. On September 26th, the S&P 500 Index achieved a record high, the Russell 2000 Index also moved higher over the quarter but remains roughly 10% below its all-time high. The Conestoga Small Cap Composite surged 10.09% (net) in the third quarter outperforming the Russell 2000 Growth Index’s 8.41% return. The Conestoga SMid Cap Composite returned 12.94% (net) versus the Russell 2500 Growth Index’s 6.99% return. The Conestoga Micro Cap Composite advanced 7.60% (net) but trailed the Russell Microcap Growth Index’s return of 8.57%. Finally, the Conestoga Mid Cap Composite returned 8.36% (net) outperforming the Russell Midcap Growth Index’s 6.54%. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
Conestoga Capital Advisors highlighted stocks like AAON, Inc. (NASDAQ:AAON), in the third quarter 2024 investor letter. AAON, Inc. (NASDAQ:AAON), with a market capitalization of $8.896 billion, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment. One-month return of AAON, Inc. (NASDAQ:AAON) was 2.25%, and its shares gained 106.37% of their value over the last 52 weeks. On October 21, 2024, AAON, Inc. (NASDAQ:AAON) stock closed at $109.81 per share.
Conestoga Capital Advisors stated the following regarding AAON, Inc. (NASDAQ:AAON) in its Q3 2024 investor letter:
“AAON, Inc. (NASDAQ:AAON): Based in Tulsa, OK, this specialty heating, ventilation, and air conditioning company (HVAC) announced quarterly earnings that exceeded expectations. Management reported that the resolution of production issues earlier in 2024 led to increased production and efficiencies. The solid results were led by strength in the data center market. This strength offset short-term uncertainty in the traditional rooftop unit division. AAON’s order backlog also increased 23% and profit margins increased to an all-time high level.”
A technician surrounded by complex chillers and data center cooling solutions.
AAON, Inc. (NASDAQ:AAON) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held AAON, Inc. (NASDAQ:AAON) at the end of the second quarter which was 20 in the previous quarter. The second quarter net sales of AAON, Inc. (NASDAQ:AAON) increased to $313.6 million from $284 million in Q2 2023. While we acknowledge the potential of AAON, Inc. (NASDAQ:AAON) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed AAON, Inc. (NASDAQ:AAON) and shared NCG Small Cap Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.