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 Axon Enterprise, Inc. (NASDAQ:AXON). Axon Enterprise, Inc. (NASDAQ:AXON) manufacturers conducted energy devices (CEDs) under the TASER brand. The one-month return Axon Enterprise, Inc. (NASDAQ:AXON) was 14.63%, and its shares gained 151.33% of their value over the last 52 weeks. On February 10, 2025, Axon Enterprise, Inc. (NASDAQ:AXON) stock closed at $677.85 per share, with a market capitalization of $50.681 billion.
Conestoga Capital Advisors stated the following regarding Axon Enterprise, Inc. (NASDAQ:AXON) in its Q4 2024 investor letter:
“Axon Enterprise, Inc. (NASDAQ:AXON) continued to see robust demand for its products and services, from TASERs to body cameras to the software that powers many applications within public safety operations. Shares jumped on third quarter results, which saw revenue grow 32%, EBTIDA 58%, and backlog 33% to $7.7 billion. In addition, AXON continued to expand adjusted EBITDA margins, which were above 25% in the third quarter. AXON was a leader in three of the four quarters in 2024.”
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Axon Enterprise, Inc. (NASDAQ:AXON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held Axon Enterprise, Inc. (NASDAQ:AXON) at the end of the third quarter which was 36 in the previous quarter. In the third quarter, Axon Enterprise, Inc.’s (NASDAQ:AXON) revenue grew 32% year-over-year and delivered strong adjusted EBITDA with a 26.7% margin. While we acknowledge the potential of Axon Enterprise, Inc. (NASDAQ:AXON) 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 Axon Enterprise, Inc. (NASDAQ:AXON) and shared the list of top AI stocks to watch amid US-China AI war. Axon Enterprise, Inc.’s (NASDAQ:AXON) impressive results contributed to Carillon Eagle Mid Cap Growth Fund’s performance in Q4 2024. 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.