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Conestoga Capital Advisors, an asset management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets started the year with a rally due to optimism about a strong economy and expectations of moderating inflation and lower interest rates. However, concerns over slowing earnings from major Technology companies, geopolitical tensions, and an upcoming announcement on tariffs led to a sharp decline in equities by the end of the first quarter. Investors sought safety, driving U.S. Treasury yields down. The Conestoga Small Cap Composite returned -11.35% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. The Conestoga SMid Cap Composite returned -5.73% compared to the Russell 2500 Growth Index’s -10.80% return. The Conestoga Micro-Cap Composite returned -8.24% vs the Russell Microcap Growth Index’s return of -17.75%. Finally, the Conestoga Mid Cap Composite returned 0.96% (net), compared to the Russell Midcap Growth Index’s -7.12% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.
In its first-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as The Descartes Systems Group Inc. (NASDAQ:DSGX). Headquartered in Waterloo, Canada, The Descartes Systems Group Inc. (NASDAQ:DSGX) provides cloud-based logistics and supply chain solutions. The one-month return of The Descartes Systems Group Inc. (NASDAQ:DSGX) was 4.95%, and its shares gained 12.85% of their value over the last 52 weeks. On April 28, 2025, The Descartes Systems Group Inc. (NASDAQ:DSGX) stock closed at $105.82 per share, with a market capitalization of $9.07 billion.
Conestoga Capital Advisors stated the following regarding The Descartes Systems Group Inc. (NASDAQ:DSGX) in its Q1 2025 investor letter:
"The Descartes Systems Group Inc. (NASDAQ:DSGX) is a leading provider of cloud-based logistics and supply chain solutions with over 26,000 customers worldwide. After being a leading contributor to portfolio return last quarter, DSGX traded lower on in-line quarterly results that revealed a deceleration in organic revenue growth. In addition, guidance was more conservative due to the number of crosscurrents in the supply chain and logistics market. DSGX should be well positioned as tariffs and increasing global trading complexity necessitates the need for the technology solutions DSGX offers."
A warehouse filled with packages and parcels, signifying the scale of e-commerce enablement.