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 Fortinet, Inc. (NASDAQ:FTNT). Fortinet, Inc. (NASDAQ:FTNT) is a global provider of cybersecurity and convergence of networking and security solutions. The one-month return Fortinet, Inc. (NASDAQ:FTNT) was 16.41%, and its shares gained 52.84% of their value over the last 52 weeks. On February 11, 2025, Fortinet, Inc. (NASDAQ:FTNT) stock closed at $108.33 per share, with a market capitalization of $83.03 billion.
Conestoga Capital Advisors stated the following regarding Fortinet, Inc. (NASDAQ:FTNT) in its Q4 2024 investor letter:
“Fortinet, Inc. (NASDAQ:FTNT) is the worldwide market share leader in network security firewalls (by units). During the quarter, FTNT continued to see positive momentum in firewall services revenue and posted a big beat and raise of results and guidance. Looking ahead, the company is expecting a larger-than-normal product refresh cycle, with many customers ordering well in advance (often one year prior) of their firewall’s 2026 end-of-life schedule.”
A close-up of a user authenticating into a secure network using a two-factor authentication process.
Fortinet, Inc. (NASDAQ:FTNT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Fortinet, Inc. (NASDAQ:FTNT) at the end of the third quarter which was 42 in the previous quarter. Fortinet, Inc. (NASDAQ:FTNT) generated a record operation margin of 39% and total revenue growth of 17% in the fourth quarter 2024. While we acknowledge the potential of Fortinet, Inc. (NASDAQ:FTNT) 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 Fortinet, Inc. (NASDAQ:FTNT) and shared AI news making waves on Wall Street. Fortinet, Inc. (NASDAQ:FTNT) contributed to Conestoga Capital Advisors’ performance 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.