Conestoga Capital Advisors, an asset management company, released its “Small 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. Equity markets are also driven by the moderation theme. 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%. Conestoga Small Cap Composite fell -5.59% in the second quarter compared to -2.92% for the Russell 2000 Growth Index. Stock selection was the major reason for the underperformance of the portfolio relative to the index. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
Conestoga Capital Advisors highlighted stocks like Exponent, Inc. (NASDAQ:EXPO), in the second quarter 2024 investor letter. Exponent, Inc. (NASDAQ:EXPO), with a market capitalization of $5.351 billion, is a science and engineering consulting company. The one-month return of Exponent, Inc. (NASDAQ:EXPO) was 1.37%, and its shares gained 20.01% of their value over the last 52 weeks. On August 15, 2024, Exponent, Inc. (NASDAQ:EXPO) stock closed at $105.48 per share.
Conestoga Capital Advisors stated the following regarding Exponent, Inc. (NASDAQ:EXPO) in its Q2 2024 investor letter:
“Exponent, Inc. (NASDAQ:EXPO): EXPO is a scientific and engineering consulting firm that specializes in highly technical analysis across more than 90 scientific disciplines. EXPO originally guided to softness in the first half of 2024 that would accelerate to a normal growth cadence in the second half. A surge of demand in February and March caused EXPO to beat and raise guidance during its first quarter call. EXPO raised its growth rate and margin guidance, leading to a strong response in its shares.”
A chemical engineer studying a lab sample of a food product for safety regulations.
Exponent, Inc. (NASDAQ:EXPO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Exponent, Inc. (NASDAQ:EXPO) at the end of the first quarter which was 19 in the previous quarter. In Q2 2024, Exponent, Inc.’s (NASDAQ:EXPO) total revenues were roughly $140.5 million, which remained flat compared to Q2 2023. The company’s net income increased to $29.2 million, or $0.57 per diluted share in the second quarter, from $25.7 million, or $0.50 per diluted share, in Q2 2023. While we acknowledge the potential of Exponent, Inc. (NASDAQ:EXPO) 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 Exponent, Inc. (NASDAQ:EXPO) and shared the list of best consulting stocks to buy. Exponent, Inc. (NASDAQ:EXPO) negatively impacted the Conestoga Capital Advisors’ performance in Q1 2024. 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.
