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 Montrose Environmental Group, Inc. (NYSE:MEG). Montrose Environmental Group, Inc. (NYSE:MEG) is an environmental services company. The one-month return Montrose Environmental Group, Inc. (NYSE:MEG) was -15.87%, and its shares lost 42.35% of their value over the last 52 weeks. On February 11, 2025, Montrose Environmental Group, Inc. (NYSE:MEG) stock closed at $19.03 per share, with a market capitalization of $652.742 million.
Conestoga Capital Advisors stated the following regarding Montrose Environmental Group, Inc. (NYSE:MEG) in its Q4 2024 investor letter:
“Montrose Environmental Group, Inc. (NYSE:MEG) is a pure-play environmental services company that offers end-to-end solutions for addressing environmental issues. The stock has underperformed the market since the Supreme Court’s June ruling which overturned a legal precedent (known as “Chevron Deference”). This, coupled with the administration change has introduced fears that the Environmental Protection Agency (EPA) will not be able to push new regulations and/or delay enforcement actions of existing environmental regulations.”
A biohazard waste disposal team safely transferring contaminated water for treatment.
Montrose Environmental Group, Inc. (NYSE:MEG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Montrose Environmental Group, Inc. (NYSE:MEG) at the end of the third quarter which was 17 in the previous quarter. Montrose Environmental Group, Inc.’s (NYSE:MEG) revenues surged to a record $178.7 million in the third quarter of 2024, a 6.4% increase over Q3 2023. While we acknowledge the potential of Montrose Environmental Group, Inc. (NYSE:MEG) 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 Montrose Environmental Group, Inc. (NYSE:MEG) and shared Baron Discovery Fund’s views on the company. Montrose Environmental Group, Inc. (NYSE:MEG) detracted from Conestoga Capital Advisors’ performance in the previous quarter despite strong results. 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.