Conestoga Capital Advisors, an asset management company, released its “Small 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. Equity markets are also driven by the moderation theme. 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%. Conestoga Small Cap Composite fell -5.59% in the second quarter compared to -2.92% for the Russell 2000 Growth Index. Stock selection was the major reason for the underperformance of the portfolio relative to the index. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
Conestoga Capital Advisors highlighted stocks like Definitive Healthcare Corp. (NASDAQ:DH) in the second quarter 2024 investor letter. Definitive Healthcare Corp. (NASDAQ:DH) provides software as a service (SaaS) healthcare commercial intelligence platform. The one-month return of Definitive Healthcare Corp. (NASDAQ:DH) was -29.03%, and its shares lost 59.90% of their value over the last 52 weeks. On August 15, 2024, Definitive Healthcare Corp. (NASDAQ:DH) stock closed at $4.01 per share with a market capitalization of $469.663 million.
Conestoga Capital Advisors stated the following regarding Definitive Healthcare Corp. (NASDAQ:DH) in its Q2 2024 investor letter:
“Definitive Healthcare Corp. (NASDAQ:DH): Based in Framingham, MA, DH is a leading provider of healthcare commercial intelligence software. While the end market has been extremely challenging for all participants over the past two years, DH has also executed poorly. In the most recent quarter, strategic changes to the sales force caused significant disruption to new customer acquisition and led to a full-year guidance downgrade just ten weeks after initiating guidance. Combined with instability at the management level, this deterioration in fundamentals constitutes a thesis change.”
A doctor in a laboratory, overseeing the development of Artificial Intelligence (AI).
Definitive Healthcare Corp. (NASDAQ:DH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Definitive Healthcare Corp. (NASDAQ:DH) at the end of the first quarter which was 8 in the previous quarter. In the second quarter, Definitive Healthcare Corp. (NASDAQ:DH) generated $63.7 million in revenues, reflecting a 5% year-over-year increase, which exceeded the guidance range. While we acknowledge the potential of Definitive Healthcare Corp. (NASDAQ:DH) 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 Definitive Healthcare Corp. (NASDAQ:DH) and shared the list of latest growing health tech companies in the world. Conestoga Capital Advisors initiated a position in Definitive Healthcare Corp. (NASDAQ:DH) during Q3 2023. 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.
