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 Simpson Manufacturing Co., Inc. (NYSE:SSD). Simpson Manufacturing Co., Inc. (NYSE:SSD) offers wood construction products and pre-fabricated lateral systems for use in construction. The one-month return Simpson Manufacturing Co., Inc. (NYSE:SSD) was 1.55%, and its shares lost 10.28% of their value over the last 52 weeks. On February 10, 2025, Simpson Manufacturing Co., Inc. (NYSE:SSD) stock closed at $166.88 per share, with a market capitalization of $7.036 billion.
Conestoga Capital Advisors stated the following regarding Simpson Manufacturing Co., Inc. (NYSE:SSD) in its Q4 2024 investor letter:
“Simpson Manufacturing Co., Inc. (NYSE:SSD) reported weaker than expected Q3 results amid continued softness in US housing starts. Although Q3 sales were stable, increased costs prompted management to lower its full-year operating margin outlook, citing a slower recovery in storm-affected areas. Strategic investments are ongoing, with recent acquisitions expected to broaden the company’s offerings. Focused on cost control and these strategic investments, management aims to restore a 20% operating margin as housing demand improves. We believe, the company’s strong balance sheet and operational efficiency initiatives position it well for an eventual housing market recovery.”
A worker on a construction site using specialized tools to connect concrete blocks.
Simpson Manufacturing Co., Inc. (NYSE:SSD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Simpson Manufacturing Co., Inc. (NYSE:SSD) at the end of the third quarter which was 25 in the previous quarter. While we acknowledge the potential of Simpson Manufacturing Co., Inc. (NYSE:SSD) 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 Simpson Manufacturing Co., Inc. (NYSE:SSD) and shared the list of best land and timber stocks to buy according to analysts. 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.