One of the biggest holdings of the SPDR S&P 600 Small Cap Growth ETF (NYSE:SLYG) is SPS Commerce, Inc. (NASDAQ:SPSC), a firm that provides cloud-based supply chain management solutions. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Driehaus Capital is a leading shareholder in SPS Commerce, Inc. (NASDAQ:SPSC) with 223,922 shares worth more than $43 million.
Just like Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), SPS Commerce, Inc. (NASDAQ:SPSC) is one of the growth stocks with strong upside potential.
In its Q2 2022 investor letter, Conestoga Capital Advisors, an asset management firm, highlighted a few stocks and SPS Commerce, Inc. (NASDAQ:SPSC) was one of them. Here is what the fund said:
“SPS Commerce, Inc. (NASDAQ:SPSC): SPSC is a provider of supply chain management software and has now been a leader in three of the past four quarters. SPSC benefits from secular growth in the digitization of ecommerce and from a steady, durable business model that has remained resilient in a slower macroeconomic environment. The company highlights that historically they have only seen about a 1% drag on revenue growth from macro slowdowns. SPSC grew revenue 20% and earnings per share by 22% in their most recent quarter.”
YTD Return as of September 14: 4.5%
5-Year Return as of September 14: 8.8%
Vanguard S&P Small-Cap 600 Growth Index Fund (NYSE:VIOG) is an exchange traded fund that tracks the performance of the S&P SmallCap 600 Growth Index. The latter represents the growth companies of the S&P SmallCap 600 Index.
Vanguard S&P Small-Cap 600 Growth Index Fund (NYSE:VIOG) holds a large stake in Rambus Inc. (NASDAQ:RMBS), a semiconductor firm. At the end of the second quarter of 2023, 31 hedge funds in the database of Insider Monkey held stakes worth $413 million in Rambus Inc. (NASDAQ:RMBS), compared to 26 in the preceding quarter worth $256 million.
YTD Return as of September 14: 4.9%
5-Year Return as of September 14: 8.6%
iShares S&P Small-Cap 600 Growth ETF (NASDAQ:IJT) is an exchange traded fund that invests at least 80% of total assets in securities on an index that measures the equity market performance of small capitalization growth stocks in the US.
A flagship holding of the iShares S&P Small-Cap 600 Growth ETF (NASDAQ:IJT) is Onto Innovation Inc. (NYSE:ONTO), a firm that offers process control tools that perform macro defect inspection and 2D/3D optical metrology, lithography systems, and process control analytical software worldwide. At the end of the second quarter of 2023, 20 hedge funds in the database of Insider Monkey held stakes worth $176 million in Onto Innovation Inc. (NYSE:ONTO), up from 16 in the previous quarter worth $134 million.
In its Q3 2022 investor letter, TimesSquare Capital Management highlighted a few stocks and Onto Innovation Inc. (NYSE:ONTO) was one of them. Here is what the fund said:
“New to the strategy was Onto Innovation Inc. (NYSE:ONTO), which develops inspection technologies for use across the entire semiconductor fabrication process. Though other companies in the fabrication industry reported lower results or cited weak market conditions, Onto’s fundamentals were relatively unaffected. Sales for its process control systems were a function of transitions to new technologies and the construction of new facilities—both of which were increasing—and not merely overall semiconductor capacities. Nevertheless, Onto’s shares pulled back mid-quarter, which made an attractive entry point for us.”
YTD Return as of September 14: 5.3%
5-Year Return as of September 14: 11.4%
Nuveen ESG Small-Cap ETF (BATS:NUSC) is an exchange traded fund that invests exclusively in small cap stocks that exhibit growth characteristics. The fund invests at least 80% of net assets in small cap securities listed on US exchanges that meet certain environmental, social, and governance criteria.
A premier holding of the Nuveen ESG Small-Cap ETF (BATS:NUSC) is EMCOR Group, Inc. (NYSE:EME), a company that provides electrical and mechanical construction, and facilities services . At the end of the second quarter of 2023, 35 hedge funds in the database of Insider Monkey held stakes worth $375 million in EMCOR Group, Inc. (NYSE:EME), compared to 26 in the preceding quarter worth $306 million.
In its Q2 2023 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and EMCOR Group, Inc. (NYSE:EME) was one of them. Here is what the fund said:
“EMCOR Group, Inc. (NYSE:EME) and Madison Square Garden Entertainment were eliminated in the second quarter. EMCOR Group has been in the portfolio for nearly twelve years and was an outstanding performer as the company generated a 20% annualized return over the holding period. The market capitalization was approaching $8 billion when we exited the position. Consistent with our strategy, we prefer to own companies with market capitalizations below $3 billion. Yet, we do not have a “hard sell” when market capitalizations surpass $3 billion. Instead, it becomes an easier candidate for sale when valuations are elevated. We believe the combination of valuation and market capitalization achieved in the second quarter justified exiting the position. We wish the management team well as they have built an outstanding company.”
YTD Return as of September 14: 6.1%
5-Year Return as of September 14: 21.5%
iShares ESG Aware MSCI USA Small-Cap ETF (BATS:ESML) is an exchange traded fund that invests in companies on the MSCI USA Small Cap Index. The index is designed to measure the performance of the small cap segment of the US equity market.
iShares ESG Aware MSCI USA Small-Cap ETF (BATS:ESML) holds a large stake in Federal Realty Investment Trust (NYSE:FRT), a firm that invests in high-quality retail-based properties located primarily in major coastal markets. At the end of the second quarter of 2023, 15 hedge funds in the database of Insider Monkey held stakes worth $124 million in Federal Realty Investment Trust (NYSE:FRT), compared to 21 in the preceding quarter worth $82 million.
YTD Return as of September 14: 7.1%
5-Year Return as of September 14: 5.8%
Pacer US Small Cap Cash Cows Growth Leaders ETF (NASDAQ:CAFG) is a fund that tracks the performance of small cap companies in the US. The fund uses a rules-based methodology that seeks to provide exposure to small capitalization US-based companies with above average free cash flow margins.
One of the biggest holdings of Pacer US Small Cap Cash Cows Growth Leaders ETF (NASDAQ:CAFG) is Powell Industries, Inc. (NASDAQ:POWL), a firm that designs, develops, manufactures, sells, and services custom-engineered equipment and systems for the distribution, control, and monitoring of electrical energy. At the end of the second quarter of 2023, 14 hedge funds in the database of Insider Monkey held stakes worth $33 million in Powell Industries, Inc. (NASDAQ:POWL), compared to 8 in the preceding quarter worth $25 million.
In its Q4 2022 investor letter, Heartland Advisors, an asset management firm, highlighted a few stocks and Powell Industries, Inc. (NASDAQ:POWL) was one of them. Here is what the fund said:
“It’s more accurate to say we favor companies with defensive characteristics that are likely to be secular winners, even if the economy doesn’t offer much of a tailwind. And once the next cycle begins, these are companies that stand to benefit as the economy re-accelerates.
YTD Return as of September 14: 7.3%
5-Year Return as of September 14: 23.4%
Invesco S&P SmallCap Momentum ETF (NYSE:XSMO) is an exchange traded fund that invests in firms on the S&P SmallCap 600 Index that have the highest momentum score. The fund focuses on small cap growth stocks that may outperform the market in the short-term.
A premier holding of Invesco S&P SmallCap Momentum ETF (NYSE:XSMO) is e.l.f. Beauty, Inc. (NYSE:ELF), a firm that provides cosmetic and skin care products. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Driehaus Capital is a leading shareholder in e.l.f. Beauty, Inc. (NYSE:ELF) with 891,025 shares worth more than $101 million.
Alongside Tesla, Inc. (NASDAQ:TSLA), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), e.l.f. Beauty, Inc. (NYSE:ELF) is one of the growth stocks with strong upside potential.
In its Q4 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and e.l.f. Beauty, Inc. (NYSE:ELF) was one of them. Here is what the fund said:
“New positions initiated in Q4 included shorts International Business Machines (IBM), Acushnet Holdings (GOLF) and E.l.f. Beauty, Inc. (NYSE:ELF). Shares of value-oriented beauty brand ELF received a meaningful boost from normalizing beauty usage and spending in a post-COVID environment, which we believe has contributed to its premium multiple relative to competitors in the beauty space. As this temporary lift unwinds, we expect elf’s valuation to similarly return to a level better aligned with its product offerings.”
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Disclosure. None. 10 Small Cap Growth ETFs is originally published on Insider Monkey.
