Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. For the second consecutive year, U.S. equity indices ended the year with double-digit returns after generating modest returns in the fourth quarter of 2024. Conestoga’s investment plans were hindered by the enthusiasm for everything artificial intelligence (AI) related, which the firm believes led to a more speculative investing climate. The Conestoga Small Cap Composite surged 1.67% (net) in the fourth quarter compared to the Russell 2000 Growth Index’s 1.70% return. The Conestoga SMid Cap Composite returned -0.68% (net) trailing the Russell 2500 Growth Index’s 2.43% return. The Conestoga Micro Cap Composite advanced 9.91% (net) vs the Russell Microcap Growth Index’s return of 11.55%. Finally, the Conestoga Mid Cap Composite returned -4.63% (net) underperforming the Russell Midcap Growth Index’s 8.14% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
In its fourth quarter 2024 investor letter, Conestoga Capital Advisors emphasized stocks such as Altair Engineering Inc. (NASDAQ:ALTR). Altair Engineering Inc. (NASDAQ:ALTR) offers software and cloud solutions for simulation, high-performance computing, data analytics, and artificial intelligence. The one-month return Altair Engineering Inc. (NASDAQ:ALTR) was 0.01%, and its shares gained 28.53% of their value over the last 52 weeks. On February 10, 2025, Altair Engineering Inc. (NASDAQ:ALTR) stock closed at $110.41 per share, with a market capitalization of $9.444 billion.
Conestoga Capital Advisors stated the following regarding Altair Engineering Inc. (NASDAQ:ALTR) in its Q4 2024 investor letter:
“Altair Engineering Inc. (NASDAQ:ALTR), a leader in design and simulation software, announced on October 31st that it was being acquired by Siemens for $113 per share, representing an equity value of $10.6 billion. The price represented a 19% premium to the stock’s unaffected market price on October 21st and a 13% premium to the stock’s all-time high closing price. The deal valued ALTR at approximately 14X its 2025 revenue and 63X EBITDA.”
A computer programmer developing a software application for high-performance computing.
Altair Engineering Inc. (NASDAQ:ALTR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Altair Engineering Inc. (NASDAQ:ALTR) at the end of the third quarter which was 12 in the previous quarter. While we acknowledge the potential of Altair Engineering Inc. (NASDAQ:ALTR) 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 Altair Engineering Inc. (NASDAQ:ALTR) and shared AI news and ratings investors are keeping their eye on. Conestoga Capital Advisors shared its optimistic views on Altair Engineering Inc. (NASDAQ:ALTR) in the previous quarter investor letter. 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.