Fred Alger Management, an investment management company, released its “Alger Small Cap Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities rose in the third quarter, driven by a dovish monetary policy shift from the Federal Reserve (Fed), and optimism around a soft economic landing. Class A shares of the fund underperformed the Russell 2000 Growth Index in the quarter. The Health Care and Consumer Discretionary sectors positively influenced performance, while Financials and Information Technology negatively impacted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Alger Small Cap Growth Fund 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 24.13%, and its shares gained 176.07% of their value over the last 52 weeks. On November 29, 2024, Q2 Holdings, Inc. (NYSE:QTWO) stock closed at $104.74 per share with a market capitalization of $6.326 billion.
Alger Small Cap Growth Fund stated the following regarding Q2 Holdings, Inc. (NYSE:QTWO) in its Q3 2024 investor letter:
“Q2 Holdings, Inc. (NYSE:QTWO) provides secure, cloud-based digital solutions tailored for financial institutions, enabling seamless transactions and engagement for end users. The company serves regional and community financial institutions, alternative financial institutions, and fintech companies with a comprehensive suite of digital banking, lending, leasing, and business-as-a-service solutions. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal second quarter operating results, along with management raising their fiscal full year revenue guidance. Management also noted that they expect subscription revenue to grow by 15% in 2025, aligning with their 2024 growth rate, despite their earlier annualized projections of 14% for 2024 through 2026. Management explained that the reason why growth isn’t stronger is because some large tier-1 banks signed in late 2023 and early 2024, which won’t go live until mid-2025, though should boost 2026 subscription growth.”
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, 21 hedge fund portfolios held Q2 Holdings, Inc. (NYSE:QTWO) at the end of the third 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 Conestoga Capital Advisors’ views on the company. 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.