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 Bright Horizons Family Solutions Inc. (NYSE:BFAM). Bright Horizons Family Solutions Inc. (NYSE:BFAM), with a market capitalization of $7.135 billion, provides early education and childcare, back-up care, educational advisory, and other workplace solutions services. The one-month return Bright Horizons Family Solutions Inc. (NYSE:BFAM) was 6.73%, and its shares gained 27.89% of their value over the last 52 weeks. On February 10, 2025, Bright Horizons Family Solutions Inc. (NYSE:BFAM) stock closed at $122.63 per share.
Conestoga Capital Advisors stated the following regarding Bright Horizons Family Solutions Inc. (NYSE:BFAM) in its Q4 2024 investor letter:
“Bright Horizons Family Solutions Inc. (NYSE:BFAM) is the largest private sector provider of employer sponsored childcare. The stock underperformed during the quarter after reporting a moderation in its full-service center utilization ramp back to pre-pandemic levels. We continue to believe it will take a few annual enrollment cycles to refill childcare centers and return to prior profitability.”
Young children smiling widely as they have lunch in a bright and fun educational center.
Bright Horizons Family Solutions Inc. (NYSE:BFAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Bright Horizons Family Solutions Inc. (NYSE:BFAM) at the end of the third quarter which was 26 in the previous quarter. Bright Horizons Family Solutions Inc.’s (NYSE:BFAM) overall revenue in the third quarter increased 11% to $719 million. While we acknowledge the potential of Bright Horizons Family Solutions Inc. (NYSE:BFAM) 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 Bright Horizons Family Solutions Inc. (NYSE:BFAM) and shared Conestoga Capital Advisors’ 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.