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 Q2 Holdings, Inc. (NYSE:QTWO) in the third quarter 2024 investor letter. Q2 Holdings, Inc. (NYSE:QTWO) offers cloud-based digital solutions to regional and community financial institutions. The one-month return of Q2 Holdings, Inc. (NYSE:QTWO) was 6.28%, and its shares gained 163.49% of their value over the last 52 weeks. On October 21, 2024, Q2 Holdings, Inc. (NYSE:QTWO) stock closed at $83.42 per share with a market capitalization of $5.029 billion.
Conestoga Capital Advisors stated the following regarding Q2 Holdings, Inc. (NYSE:QTWO) in its Q3 2024 investor letter:
“Q2 Holdings, Inc. (NYSE:QTWO):Based in Austin, TX, this company provides software and services to mid-sized bank and regional financial services firms. The company has rebounded from the early 2023 banking crisis, which raised concerns for its end market’s spending on digital banking. The feared slowdown in spending failed to materialize, keeping revenue growth on track. In fact, demand for digital banking has significantly increased since early 2023. QTWO’s management team has also implemented expense management programs driving significant improvement in its profitability.”
A finance professional at their computer logging into the company’s branded digital banking platform.
Q2 Holdings, Inc. (NYSE:QTWO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Q2 Holdings, Inc. (NYSE:QTWO) at the end of the second quarter which was 20 in the previous quarter. While we acknowledge the potential of Q2 Holdings, Inc. (NYSE:QTWO) 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 Q2 Holdings, Inc. (NYSE:QTWO) and shared Alger Small Cap Growth Fund’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.