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 NCino, Inc. (NASDAQ:NCNO). Headquartered in Wilmington, North Carolina, NCino, Inc. (NASDAQ:NCNO) offers cloud-based software applications to financial institutions. The one-month return NCino, Inc. (NASDAQ:NCNO) was -0.06%, and its shares gained 8.24% of their value over the last 52 weeks. On February 10, 2025, NCino, Inc. (NASDAQ:NCNO) stock closed at $32.96 per share, with a market capitalization of $3.817 billion.
Conestoga Capital Advisors stated the following regarding NCino, Inc. (NASDAQ:NCNO) in its Q4 2024 investor letter:
“NCino, Inc. (NASDAQ:NCNO) provides cloud-based software solutions to financial institutions to facilitate lending, account opening, and onboarding. NCNO’s Bank Operating System has become the market leader in commercial lending divisions within banks. NCNO has broadened their platform to include mortgage origination, consumer lending, and small business lending. NCNO operates in a serviceable addressable market of nearly $40 billion. NCNO’s revenue is 86% recurring, grows in the mid-teens range organically, and is geographically diverse with 20% coming from international markets. NCNO targets being a “rule of 50” company and has expanded operating margins rapidly to 20%, with the goal of reaching >30%. NCNO is headquartered in Wilmington, NC.”
A financial professional utilizing a cloud-based software application.
NCino, Inc. (NASDAQ:NCNO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held NCino, Inc. (NASDAQ:NCNO) at the end of the third quarter which was 30 in the previous quarter. While we acknowledge the potential of NCino, Inc. (NASDAQ:NCNO) 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 NCino, Inc. (NASDAQ:NCNO) and shared AI news investors probably missed. 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.