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 Simulations Plus, Inc. (NASDAQ:SLP) in the second quarter 2024 investor letter. Simulations Plus, Inc. (NASDAQ:SLP) focuses on development of drug discovery and development software that utilizes artificial intelligence and machine learning based technology for modeling and simulation, and prediction of molecular properties. The one-month return of Simulations Plus, Inc. (NASDAQ:SLP) was -11.80%, and its shares lost 21.31% of their value over the last 52 weeks. On August 15, 2024, Simulations Plus, Inc. (NASDAQ:SLP) stock closed at $36.48 per share with a market capitalization of $729.881 million.
Conestoga Capital Advisors stated the following regarding Simulations Plus, Inc. (NASDAQ:SLP) in its Q2 2024 investor letter:
“Simulations Plus, Inc. (NASDAQ:SLP): SLP’s financial results for its Fiscal 2Q24, reported in early April, were robust, with revenue and earnings slightly surpassing consensus estimates. The management team expressed cautious optimism regarding the potential for an improved funding landscape for their pharmaceutical and biotechnology clients. Moreover, the company’s simulation software products integrate artificial intelligence (AI), positioning SLP as a small -cap company within the burgeoning AI industry trend.”
A close-up view of a scientist’s hand pressing keys on a laptop as another looks closely at a 3-D model on a large monitor.
Simulations Plus, Inc. (NASDAQ:SLP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held Simulations Plus, Inc. (NASDAQ:SLP) at the end of the first quarter which was 15 in the previous quarter. Simulations Plus, Inc. (NASDAQ:SLP) delivered solid revenue growth of 14%, diluted earnings per share of $0.15, and adjusted diluted earnings per share of $0.19 in the fiscal third quarter of 2024. While we acknowledge the potential of Simulations Plus, Inc. (NASDAQ:SLP) 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 Simulations Plus, Inc. (NASDAQ:SLP) and shared the list of most profitable stocks of the last 20 years. 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.
