Conestoga Capital Advisors, an asset management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. At its September meeting, the Federal Reserve lowered the Federal Funds rate by 50 basis points due to weaker employment growth and moderate inflation. Equity markets welcomed the news, raising optimism for a soft landing in the U.S. economy. On September 26th, the S&P 500 Index achieved a record high, the Russell 2000 Index also moved higher over the quarter but remains roughly 10% below its all-time high. The Conestoga Small Cap Composite surged 10.09% (net) in the third quarter outperforming the Russell 2000 Growth Index’s 8.41% return. The Conestoga SMid Cap Composite returned 12.94% (net) versus the Russell 2500 Growth Index’s 6.99% return. The Conestoga Micro Cap Composite advanced 7.60% (net) but trailed the Russell Microcap Growth Index’s return of 8.57%. Finally, the Conestoga Mid Cap Composite returned 8.36% (net) outperforming the Russell Midcap Growth Index’s 6.54%. 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 Construction Partners, Inc. (NASDAQ:ROAD), in the third quarter 2024 investor letter. Construction Partners, Inc. (NASDAQ:ROAD) is a civil infrastructure company that constructs and maintains roadways. The one-month return of Construction Partners, Inc. (NASDAQ:ROAD) was 18.93%, and its shares gained 117.51% of their value over the last 52 weeks. On October 21, 2024, Construction Partners, Inc. (NASDAQ:ROAD) stock closed at $84.70 per share with a market capitalization of $4.462 billion.
Conestoga Capital Advisors stated the following regarding Construction Partners, Inc. (NASDAQ:ROAD) in its Q3 2024 investor letter:
“Construction Partners, Inc. (NASDAQ:ROAD) has now been a leader in three of the past four quarters. The infrastructure spending the United States has benefitted ROAD’s markets in two ways. One, simply the level of demand and funding that is available. Two, with hot mixed asphalt plants being a fixed cost that can’t be replicated quickly, its caused tightness for supply in the market, leading to better pricing and expanding margins. ROAD continues to compliment strong organic growth with opportunistic M&A that creates further density and efficiencies in their markets.”
A construction team in a mining datacenter building work site with plans and equipment in hand.
Construction Partners, Inc. (NASDAQ:ROAD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Construction Partners, Inc. (NASDAQ:ROAD) at the end of the second quarter which was 11 in the previous quarter. While we acknowledge the potential of Construction Partners, Inc. (NASDAQ:ROAD) 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 Construction Partners, Inc. (NASDAQ:ROAD) and shared Polen U.S. Small Company Growth Strategy’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.