Conestoga Capital Advisors, an asset management company, released its “Micro-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. The moderation theme also drives equity markets. 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%. The Micro Cap Strategy declined -8.52% net-of-fees in the quarter compared to a -5.57% return for the Russell Microcap Growth Index. Underperformance was mostly caused by negative stock selection effects in the Telecommunications and industrial sectors, with Health Care being the most addictive. Sector allocation effects influenced relative returns. Also, low-beta companies with cheap multiples, the quarter’s biggest winners, were a drag on the portfolio. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Conestoga Capital Advisors highlighted stocks like Montrose Environmental Group, Inc. (NYSE:MEG) in the second quarter 2024 investor letter. Montrose Environmental Group, Inc. (NYSE:MEG) is an environmental services company. The one-month return of Montrose Environmental Group, Inc. (NYSE:MEG) was -2.89%, and its shares lost 16.53% of their value over the last 52 weeks. On August 16, 2024, Montrose Environmental Group, Inc. (NYSE:MEG) stock closed at $32.97 per share with a market capitalization of $1.129 billion.
Conestoga Capital Advisors stated the following regarding Montrose Environmental Group, Inc. (NYSE:MEG) in its Q2 2024 investor letter:
“Montrose Environmental Group, Inc. (NYSE:MEG): MEG is a pure play environmental services company that offers end-to-end solutions for addressing environmental issues that are largely insulated from economic and political cycles. The stock performed well during the quarter once management clarified that the raised full year guidance was largely organic growth and not acquisition related. The stock was also buoyed by momentum on PFAS regulation (“forever chemicals”) which may be an important revenue tailwind in the coming years for MEG given its various PFAS solutions including remediation and treatment.”
A biohazard waste disposal team safely transferring contaminated water for treatment.
Montrose Environmental Group, Inc. (NYSE:MEG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Montrose Environmental Group, Inc. (NYSE:MEG) at the end of the second quarter which was 13 in the previous quarter. Montrose Environmental Group, Inc. (NYSE:MEG)’s revenues surged to a record $173.3 million in the second quarter, an 8.9% increase over Q2 2023, and climbed by 13.1% to $328.7 million in the first half of the year. 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 addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
