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 Transcat, Inc. (NASDAQ:TRNS). Transcat, Inc. (NASDAQ:TRNS) offers calibration and laboratory instrument services. The one-month return Transcat, Inc. (NASDAQ:TRNS) was -21.87%, and its shares lost 25.42% of their value over the last 52 weeks. On February 11, 2025, Transcat, Inc. (NASDAQ:TRNS) stock closed at $80.17 per share, with a market capitalization of $746.34 million.
Conestoga Capital Advisors stated the following regarding Transcat, Inc. (NASDAQ:TRNS) in its Q4 2024 investor letter:
“Transcat, Inc. (NASDAQ:TRNS) engages in the provision of calibration and laboratory instrument services. The company’s results fell short of expectations in the fourth quarter, driven by a material slowdown in its Nexa unit’s cost control and optimization services business. Management laid out a series of changes that they expect should return Nexa to growth over the course of 2025. The changes include fully integrating Nexa’s sales and marketing into the company’s process and rebranding the business as Transcat Solutions, leveraging TRNS’s strong reputation.”
A technician inspecting a complex instrument, relics of advanced technology in the backdrop.
Transcat, Inc. (NASDAQ:TRNS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Transcat, Inc. (NASDAQ:TRNS) at the end of the third quarter which was 11 in the previous quarter. In the fiscal third quarter of 2025, Transcat, Inc.’s (NASDAQ:TRNS) consolidated revenue was up 2% to $66.8 million however, organic revenue fell 4% from prior year quarter. While we acknowledge the potential of Transcat, Inc. (NASDAQ:TRNS) 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 Transcat, Inc. (NASDAQ:TRNS) and shared The Brown Capital Management Small Company’s views on the company in the previous quarter. 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.