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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 Bright Horizons Family Solutions Inc. (NYSE:BFAM). Bright Horizons Family Solutions Inc. (NYSE:BFAM), with a market capitalization of $6.961 billion, provides early education and childcare, back-up care, educational advisory, and other workplace solutions services. The one-month return of The Bright Horizons Family Solutions Inc. (NYSE:BFAM) was -4.50%, and its shares gained 14.29% of their value over the last 52 weeks. On April 28, 2025, Bright Horizons Family Solutions Inc. (NYSE:BFAM) stock closed at $121.32 per share.
Conestoga Capital Advisors stated the following regardingBright Horizons Family Solutions Inc. (NYSE:BFAM) in its Q1 2025 investor letter:
"Bright Horizons Family Solutions Inc. (NYSE:BFAM) is the largest private sector provider of employer sponsored childcare. While many companies are operating at peak earnings, BFAM is viewed as a company which still has room to recover from the pandemic. The stock reacted favorably to seven of its last nine quarters as center enrollment and profit margins are returning to pre pandemic levels."
Young children smiling widely as they have lunch in a bright and fun educational center.
Bright Horizons Family Solutions Inc. (NYSE:BFAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Bright Horizons Family Solutions Inc. (NYSE:BFAM) at the end of the fourth quarter, compared to 33 in the third quarter. In the fourth quarter, Bright Horizons Family Solutions Inc.'s (NYSE:BFAM) revenue increased 10% to $674 million. While we acknowledge the potential of Bright Horizons Family Solutions Inc. (NYSE:BFAM) 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.