Fred Alger Management, an investment management company, released its “Alger Small Cap Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities rose during the second quarter of 2024, with the S&P 500 up 4.28%. Additionally, large-cap growth stocks saw significant gains in the quarter, while smaller-cap, especially value stocks, lagged. Class A shares of the fund underperformed the Russell 2000 Growth Index in the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Alger Small Cap Growth Fund highlighted stocks like Q2 Holdings, Inc. (NYSE:QTWO) in the second quarter 2024 investor letter. Q2 Holdings, Inc. (NYSE:QTWO) offers cloud-based digital solutions to regional and community financial institutions. The one-month return of Q2 Holdings, Inc. (NYSE:QTWO) was 3.81%, and its shares gained 122.50% of their value over the last 52 weeks. On August 20, 2024, Q2 Holdings, Inc. (NYSE:QTWO) stock closed at $72.69 per share with a market capitalization of $4.382 billion.
Alger Small Cap Growth Fund stated the following regarding Q2 Holdings, Inc. (NYSE:QTWO) in its Q2 2024 investor letter:
“Q2 Holdings, Inc. (NYSE:QTWO) provides secure, cloud-based digital solutions tailored for financial institutions, enabling seamless transactions and engagement for end users. The company serves regional and community financial institutions, alternative financial institutions, and fintech companies with a comprehensive suite of digital banking, lending, leasing, and business-as-a-service solutions. During the quarter, shares contributed to performance, primarily fueled by a rebound in bank spending following the regional banking crisis in 2023. This crisis spurred regional banks—a key customer segment for Q2—to urgently attract and retain deposits, thereby accelerating Q2’s customer conversions and leading to record-breaking quarters. Additionally, this enabled management to provide financial targets through 2026, which include margin expansion well above analyst estimates. Q2’s business momentum has shown positive inflection over the past year as the company has pivoted toward becoming a more profitable enterprise. Consequently, the company reported better-than-expected fiscal first-quarter revenue and recorded positive free cash flow for the first time in its history.”
A finance professional at their computer logging into the company’s branded digital banking platform.
Q2 Holdings, Inc. (NYSE:QTWO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Q2 Holdings, Inc. (NYSE:QTWO) at the end of the second quarter which was 20 in the previous quarter. In the first quarter, Q2 Holdings, Inc. (NYSE:QTWO) reported $165.5 million in revenues, an increase of 8% year-over-year. While we acknowledge the potential of Q2 Holdings, Inc. (NYSE:QTWO) 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 Q2 Holdings, Inc. (NYSE:QTWO) and shared Conestoga Capital Advisors’ views on the company. In addition, please check out our hedge fund investor letters Q2 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.
