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 Exponent, Inc. (NASDAQ:EXPO). Exponent, Inc. (NASDAQ:EXPO) is a science and engineering consulting company. The one-month return of Exponent, Inc. (NASDAQ:EXPO) was -0.15%, and its shares gained 21.02% of their value over the last 52 weeks. On February 10, 2025, Exponent, Inc. (NASDAQ:EXPO) stock closed at $90.86 per share, with a market capitalization of $4.596 billion.
Conestoga Capital Advisors stated the following regarding Exponent, Inc. (NASDAQ:EXPO) in its Q4 2024 investor letter:
“After being a leader in both the second and third quarters, shares of Exponent, Inc. (NASDAQ:EXPO) retreated during the fourth quarter, primarily after the election. This is likely due to the belief that the regulatory environment could be relaxed. Part of the retreat was company specific as EXPO announced consultant headcount would be below expectations for the year. While guidance was reiterated, this slows expected revenue growth in 2025.”
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Exponent, Inc. (NASDAQ:EXPO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Exponent, Inc. (NASDAQ:EXPO) at the end of the third quarter which was 23 in the previous quarter. Exponent, Inc.’s (NASDAQ:EXPO) net income for the fourth quarter of 2024 was $23.6 million, or $0.46 per diluted share, as compared to $20.9 million or $0.41 per diluted share in Q4 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 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.