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 N-able, Inc. (NYSE:NABL). N-able, Inc. (NYSE:NABL) is a technology company that offers cloud-based software solutions for managed service providers. The one-month return N-able, Inc. (NYSE:NABL) was 9.88%, and its shares lost 25.52% of their value over the last 52 weeks. On February 11, 2025, N-able, Inc. (NYSE:NABL) stock closed at $10.01 per share, with a market capitalization of $1.875 billion.
Conestoga Capital Advisors stated the following regarding N-able, Inc. (NYSE:NABL) in its Q4 2024 investor letter:
“Founded in 2000, N-able, Inc. (NYSE:NABL) is a leading software provider to the managed service providers (MSPs), with over 25,000 customers. MSPs are essentially outsourced IT departments that, in turn, sell these tools downstream to small- to medium-sized businesses of all kinds. NABL is a 100% recurring revenue business that provides software tools, including security, data protection, and remote monitoring, to their MSP customers. NABL has a nearly $40 billion total addressable market, with durable tailwinds as the complexity of security, cloud migrations, and data storage increase.”
A technician remotely monitoring and managing a server in a secure data center.
N-able, Inc. (NYSE:NABL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held N-able, Inc. (NYSE:NABL) at the end of the third quarter which was 26 in the previous quarter. While we acknowledge the potential of N-able, Inc. (NYSE:NABL) 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 N-able, Inc. (NYSE:NABL) and shared the list of best tech stocks to buy under $10. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.