Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. Small-cap equities experienced volatility in the third quarter but ultimately achieved solid gains. In July, they rose sharply due to optimism about a potential soft landing for the U.S. economy and anticipated interest-rate cuts. In September, the Federal Reserve lowered its benchmark interest rate for the first time since 2020. This environment led investors to shift their focus from mega-cap technology stocks to small-cap equities. Against this backdrop, the strategy gained 9.45%, outperforming the benchmark Russell 2000® Growth Index, which was up 8.41%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Wasatch Small Cap Growth Strategy highlighted stocks like Clearwater Analytics Holdings, Inc. (NYSE:CWAN) in the Q3 2024 investor letter. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a technology company that develops and provides a Software-as-a-Service (SaaS) solution. The one-month return of Clearwater Analytics Holdings, Inc. (NYSE:CWAN) was -3.36%, and its shares gained 42.36% of their value over the last 52 weeks. On January 3, 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) stock closed at $27.86 per share with a market capitalization of $6.89 billion.
Wasatch Small Cap Growth Strategy stated the following regarding Clearwater Analytics Holdings, Inc. (NYSE:CWAN) in its Q3 2024 investor letter:
“Clearwater Analytics Holdings, Inc. (NYSE:CWAN) was the top contributor to strategy performance during the quarter. The company offers a software platform for investment accounting, compliance, risk management and reporting that gives asset managers and insurers daily insights into portfolio holdings. The stock had declined earlier in the year when management lowered expectations for growth. At the time, we thought management may have been conservative in its guidance. The stock rebounded substantially this quarter when Clearwater released a solid set of operating results. Notably, net revenue retention, a key statistic demonstrating what existing clients purchase from the firm, continued its trend of year-over-year growth. Looking ahead, we continue to like the company’s growth potential, and believe it will benefit from a new pricing model that should reduce volatility in its revenue growth.”
A wide shot of a large financial data center.
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Clearwater Analytics Holdings, Inc. (NYSE:CWAN) at the end of the third quarter which was 20 in the previous quarter. Clearwater Analytics Holdings, Inc.’s (NYSE:CWAN) revenue for the third quarter was $115.8 million, representing a 22.4% year-on-year increase. While we acknowledge the potential of Clearwater Analytics Holdings, Inc. (NYSE:CWAN) 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 Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and shared TimesSquare Capital U.S. Small Cap Growth 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.