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 Cognex Corporation (NASDAQ:CGNX). Cognex Corporation (NASDAQ:CGNX) provides machine vision products that capture and analyze visual information to automate manufacturing and distribution tasks. The one-month return Cognex Corporation (NASDAQ:CGNX) was 0.22%, and its shares gained 6.79% of their value over the last 52 weeks. On February 11, 2025, Cognex Corporation (NASDAQ:CGNX) stock closed at $39.62 per share, with a market capitalization of $6.795 billion.
Conestoga Capital Advisors stated the following regarding Cognex Corporation (NASDAQ:CGNX) in its Q4 2024 investor letter:
“Cognex Corporation (NASDAQ:CGNX) is a leading provider of machine vision solutions used in factories and warehouses to measure, inspect and identify items to ensure accuracy. Revenue is largely dependent on customers’ capital spending, which remains challenged across most of its end markets, namely consumer electronics and logistics. One of our smaller portfolio holdings, we exited our position during the quarter to redeploy proceeds into several existing portfolio holdings.”
A worker utilizing a vision sensor to verify discrete items.
Cognex Corporation (NASDAQ:CGNX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Cognex Corporation (NASDAQ:CGNX) at the end of the third quarter which was 31 in the previous quarter. Cognex Corporation’s (NASDAQ:CGNX) revenue for the third quarter reached $235 million, which was just above the midpoint of guidance range and represented a 19% increase compared to Q3 2023. While we acknowledge the potential of Cognex Corporation (NASDAQ:CGNX) 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 Cognex Corporation (NASDAQ:CGNX) and shared the list of best automation stocks to buy according to hedge funds. 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.