Conestoga Capital Advisors, a boutique, independent investment management firm, published its fourth-quarter 2020 ‘Small Cap Growth & SMid Cap Growth’ Investor Letter – a copy of which can be downloaded here. A net return of 31% was recorded by Conestoga’s Small Cap Growth fund and 19.72% return by its SMid Cap Growth Fund for the the end year 2020. Both performed below their Russell 2000 Growth and Russell 2500 Growth benchmarks that delivered a 34.63% and 25.89% return respectively. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Conestoga Capital Advisors, in their Q4 2020 investor letter, emphasized that Avalara, Inc. (NYSE: AVLR) is among their SMid Cap Growth Fund’s Q4 2020 buys. Avalara, Inc. is a Washington-based software company that provides automated tax compliance for businesses. It currently has a $12.5 billion market capitalization. Since the beginning of the year, AVLR is down -11.37%, but its 12-month gains are still up 104.28%. As of March 5, the stock closed at $146.14 per share.
Here is what Conestoga Capital Advisors has to say about Avalara, Inc. in their Q4 2020 investor letter:
“AVLR is the leading provider of cloud-based sales tax automation and management software, primarily to small– and mid-sized businesses. The company’s suite of products automates tax compliance for companies worldwide, driving greater efficiency and avoiding costly audits. Management believes every company in the world will eventually automate their tax compliance function, allowing the company to grow revenue 25% per annum for the next ten years. Building on the foundation of cloud-based tax automation, we believe AVLR will also be successful extending the platform beyond tax to general compliance.”
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Our calculations show that Avalara, Inc. (NYSE: AVLR) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Avalara, Inc. was in 56 hedge fund portfolios compared to 46 funds in the third quarter. AVLR delivered a -12.35% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
