Conestoga Capital Advisors, an asset management company, released its “Micro-Cap Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The second quarter of 2024 may be regarded as a time of moderation. Economic indicators largely reflected slowing growth and easing inflation. The moderation theme also drives equity markets. Large-cap stocks, as measured by the S&P 500, rose 3.9% in the second quarter, however, small-cap stocks lagged again, with the Russell 2000 Index declining -3.3% and the Russell 2000 Growth Index declining -2.9%. The Micro Cap Strategy declined -8.52% net-of-fees in the quarter compared to a -5.57% return for the Russell Microcap Growth Index. Underperformance was mostly caused by negative stock selection effects in the Telecommunications and industrial sectors, with Health Care being the most addictive. Sector allocation effects influenced relative returns. Also, low-beta companies with cheap multiples, the quarter’s biggest winners, were a drag on the portfolio. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Conestoga Capital Advisors highlighted stocks like Transcat, Inc. (NASDAQ:TRNS) in the second quarter 2024 investor letter. Transcat, Inc. (NASDAQ:TRNS) offers calibration and laboratory instrument services. The one-month return of Transcat, Inc. (NASDAQ:TRNS) was -12.90%, and its shares gained 25.66% of their value over the last 52 weeks. On August 16, 2024, Transcat, Inc. (NASDAQ:TRNS) stock closed at $119.20 per share with a market capitalization of $1.09 million.
Conestoga Capital Advisors stated the following regarding Transcat, Inc. (NASDAQ:TRNS) in its Q2 2024 investor letter:
“Transcat, Inc. (NASDAQ:TRNS): TRNS engages in the provision of calibration and laboratory instrument services. TRNS reported Fiscal 4Q24 revenue above consensus. Better than expected revenue growth continued to be driven by strong organic demand as well as benefits from recent acquisitions. Gross margins increased from the year ago period, driven by a combination of revenue mix and ongoing efficiency improvements. We believe underlying trends within the company’s core customer verticals should continue to support organic growth and drive high visibility recurring revenue.”
A technician inspecting a complex instrument, relics of advanced technology in the backdrop.
Transcat, Inc. (NASDAQ:TRNS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Transcat, Inc. (NASDAQ:TRNS) at the end of the second quarter which was 11 in the previous quarter. Transcat, Inc.’s (NASDAQ:TRNS) consolidated revenue increased by 10% to $66.7 million in the first quarter of fiscal 2025, primarily due to the company’s outstanding Rental performance and ongoing demand for Services. While we acknowledge the potential of Transcat, Inc. (NASDAQ:TRNS) 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 Transcat, Inc. (NASDAQ:TRNS) and shared the list of most profitable stocks of the last 20 years. In addition, please check out our hedge fund investor letters Q2 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.
