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 Workiva Inc. (NYSE:WK). Workiva Inc. (NYSE:WK) offers cloud-based reporting solutions. The one-month return Workiva Inc. (NYSE:WK) was -11.95%, and its shares gained 8.47% of their value over the last 52 weeks. On February 10, 2025, Workiva Inc. (NYSE:WK) stock closed at $96.85 per share, with a market capitalization of $5.365 billion.
Conestoga Capital Advisors stated the following regarding Workiva Inc. (NYSE:WK) in its Q4 2024 investor letter:
“Workiva Inc. (NYSE:WK) is a global SaaS company that provides a cloud-based platform for financial reporting, audit, risk, compliance and Environment Social Governance (ESG). WK beat and raised their full year forecast for both revenue and operating profit in each of the first three quarters of 2024. The company continued to see an improved selling environment, despite investor concerns that a Trump administration could reduce the focus on ESG, WK’s top booking solution. WK has experienced significant growth in larger accounts, with customers that spend more than $500,000 annually growing 28% in the third quarter.”
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Workiva Inc. (NYSE:WK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Workiva Inc. (NYSE:WK) at the end of the third quarter which was 19 in the previous quarter. Workiva Inc. (NYSE:WK) reported $185.6 millions of total revenue in the third quarter, an increase of 17% compared to Q3 2023. While we acknowledge the potential of Workiva Inc. (NYSE:WK) 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 Workiva Inc. (NYSE:WK) and shared Mairs & Power Small Cap Strategy’s views on the company. 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.