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 Construction Partners, Inc. (NASDAQ:ROAD). Construction Partners, Inc. (NASDAQ:ROAD) is a civil infrastructure company that constructs and maintains roadways. The one-month return Construction Partners, Inc. (NASDAQ:ROAD) was -6.16%, and its shares gained 79.90% of their value over the last 52 weeks. On February 10, 2025, Construction Partners, Inc. (NASDAQ:ROAD) stock closed at $81.62 per share, with a market capitalization of $4.567 billion.
Conestoga Capital Advisors stated the following regarding Construction Partners, Inc. (NASDAQ:ROAD) in its Q4 2024 investor letter:
“Construction Partners, Inc. (NASDAQ:ROAD) has been a leader in six of the past seven quarters, driven by robust demand in the road maintenance and infrastructure market, partially driven by the infrastructure investment made by the Federal government. More recently, ROAD made a platform acquisition in Texas that boosted revenue by $530 million at a margin of over 22%, which is nicely accretive to ROAD’s mid-teens rate. The acquisition has enabled ROAD to meet their fiscal 2027 revenue and profitability targets two years early.”
An aerial view of a bridge under construction with workers continuing their work despite the early morning light.
Construction Partners, Inc. (NASDAQ:ROAD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Construction Partners, Inc. (NASDAQ:ROAD) at the end of the third quarter which was 13 in the previous quarter. Construction Partners, Inc.’s (NASDAQ:ROAD) revenue was $561.6 million in the fiscal first quarter of 2025, an increase of 41.6% compared to the same quarter a year ago. While we acknowledge the potential of Construction Partners, Inc. (NASDAQ:ROAD) 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 Construction Partners, Inc. (NASDAQ:ROAD) 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.