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 PROS Holdings, Inc. (NYSE:PRO) in the third quarter 2024 investor letter. PROS Holdings, Inc. (NYSE:PRO) offers software solutions that optimize the processes of selling and shopping in the digital economy. The one-month return of PROS Holdings, Inc. (NYSE:PRO) was 11.77%, and its shares lost 41.67% of their value over the last 52 weeks. On November 29, 2024, PROS Holdings, Inc. (NYSE:PRO) stock closed at $23.17 per share with a market capitalization of $1.101 billion.
Alger Small Cap Growth Fund stated the following regarding PROS Holdings, Inc. (NYSE:PRO) in its Q3 2024 investor letter:
“PROS Holdings, Inc. (NYSE:PRO) is a vertical software-as-a-service (SaaS) company that develops and sells software solutions and services to the travel and business-to-business (B2B) commerce industries. Specifically, the company provides CPQ (configure, price, quote), price optimization, revenue management and other services, where their AI-enabled, SaaS-based platform is used by some of the largest B2B and travel companies. During the quarter, the company reported strong fiscal second quarter operating results, where revenues and earnings beat analyst estimates. However, the company’s travel segment was weaker-than-expected due to inconsistent spending by airlines on new platforms, leading management to lower their fiscal 2024 revenue guidance. While the company reaffirmed its long-term goal of achieving “rule of 40” (i.e., the combined percentage of annual revenue growth and profit margins be at least 40%), management delayed this target to fiscal year 2027.”
A computer programmer working on a holographic digital twin technology software solution.
PROS Holdings, Inc. (NYSE:PRO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held PROS Holdings, Inc. (NYSE:PRO) at the end of the third quarter which was 17 in the previous quarter. PROS Holdings, Inc.’s (NYSE:PRO) subscription revenue was $67.1 million in the third quarter, up 12% year-over-year, and total revenue was $82.7 million, up 7% year-over-year. While we acknowledge the potential of PROS Holdings, Inc. (NYSE:PRO) 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 PROS Holdings, Inc. (NYSE:PRO) 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.