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 Simulations Plus, Inc. (NASDAQ:SLP) in the third quarter 2024 investor letter. Simulations Plus, Inc. (NASDAQ:SLP) focuses on the development of drug discovery and development software that utilizes artificial intelligence and machine learning based technology for modeling and simulation, and prediction of molecular properties. The one-month return of Simulations Plus, Inc. (NASDAQ:SLP) was 9.38%, and its shares lost 13.91% of their value over the last 52 weeks. On October 21, 2024, Simulations Plus, Inc. (NASDAQ:SLP) stock closed at $34.28 per share with a market capitalization of $685.864 million.
Conestoga Capital Advisors stated the following regarding Simulations Plus, Inc. (NASDAQ:SLP) in its Q3 2024 investor letter:
“Simulations Plus, Inc. (NASDAQ:SLP): Based in Lancaster, CA, this company provides software and services that allows for the modeling of drug development to the biotech and pharmaceutical industry. In the third quarter, SLP reported revenue that was in-line with expectations, but EBITDA fell slightly below estimates. The company maintained its guidance for 2024 following its acquisition of Pro-ficiency. SLP also suspended its dividend to focus on growth initiatives. Investors are questioning the strategic fit of the recent acquisitions and the pathway to improved profitability looks less clear. There is also continued concern on the spending patterns within the biotech and pharmaceutical industry.”
A close-up view of a scientist’s hand pressing keys on a laptop as another looks closely at a 3-D model on a large monitor.
Simulations Plus, Inc. (NASDAQ:SLP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held Simulations Plus, Inc. (NASDAQ:SLP) at the end of the second quarter which was 8 in the previous quarter. While we acknowledge the potential of Simulations Plus, Inc. (NASDAQ:SLP) 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 Simulations Plus, Inc. (NASDAQ:SLP) and shared Harding Loevner Global Small Companies Equity Strategy’s views on the company in the previous quarter. Conestoga Capital Advisors expressed its optimism about Simulations Plus, Inc.’s (NASDAQ:SLP) strong position in the growing AI industry in the Q2 2024 investor letter. 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.