Conestoga Capital Advisors, an asset management company, released its “Micro Cap Strategy” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. Despite growing by 12.70% net of fees in the fourth quarter, the strategy was unable to match the 15.64% return of the Russell Micro Cap Growth Index. Underperformance was mostly caused by poor stock selection in the Health Care and Industrials. Micro Cap Composite declined -1.02% net-of-fees, trailing the Russell Micro Cap Growth Index’s gain of 9.11% for 2023. Positive effects on sector allocation and stock selection in the technology and basic materials sectors did help the portfolio. The majority of the underperformance was mostly centered in the consumer discretionary, health care, and industrial sectors, where choosing stocks proved to be difficult. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Conestoga Capital Advisors Micro Cap Strategy featured stocks such as Q2 Holdings, Inc. (NYSE:QTWO) in the fourth quarter 2023 investor letter. Headquartered in Austin, Texas, Q2 Holdings, Inc. (NYSE:QTWO) is a cloud-based digital solutions provider for financial institutions. On February 16, 2024, Q2 Holdings, Inc. (NYSE:QTWO) stock closed at $42.52 per share. One-month return of Q2 Holdings, Inc. (NYSE:QTWO) was -2.25%, and its shares gained 27.73% of their value over the last 52 weeks. Q2 Holdings, Inc. (NYSE:QTWO) has a market capitalization of $2.493 billion.
Conestoga Capital Advisors Micro Cap Strategy stated the following regarding Q2 Holdings, Inc. (NYSE:QTWO) in its fourth quarter 2023 investor letter:
“Q2 Holdings, Inc. (NYSE:QTWO): QTWO is a provider of digital banking solutions to financial institutions. With over 1,400 customers and an average customer tenure of 8 years, QTWO’s stock has rebounded from the March 2023 banking scare when investors feared the collapse of Silicon Valley Bank and Signature Bank would cause regional banks to significantly slow technology spend. QTWO’s results in the past two quarters have demonstrated a strong spending environment and the company’s increasing profitability has resonated well with investors.”
A financial analyst presenting a chart of insurance solutions to a boardroom.
Q2 Holdings, Inc. (NYSE:QTWO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Q2 Holdings, Inc. (NYSE:QTWO) was held by 23 hedge fund portfolios, down from 24 in the previous quarter, according to our database.
We discussed Q2 Holdings, Inc. (NYSE:QTWO) in another article and shared Conestoga Capital Advisors’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2023 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.
