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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 Roper Technologies, Inc. (NASDAQ:ROP). Roper Technologies, Inc. (NASDAQ:ROP) designs and develops software and technology-enabled products and solutions. The one-month return of Roper Technologies, Inc. (NASDAQ:ROP) was 2.91%, and its shares gained 7.81% of their value over the last 52 weeks. On May 1, 2025, Roper Technologies, Inc. (NASDAQ:ROP) stock closed at $557.59 per share with a market capitalization of $59.877 billion.
Conestoga Capital Advisors stated the following regarding Roper Technologies, Inc. (NASDAQ:ROP) in its Q1 2025 investor letter:
"Roper Technologies, Inc. (NASDAQ:ROP) is a diversified industrial and technology (license and Software-as-a-Service) consolidator with a long history of mid-teens free-cash-flow growth. ROP is a best-in-class operator and allocator of capital. In the quarter, the company experienced accelerating organic growth and bookings momentum, and management believes this year will be good for M&A activity (at more reasonable prices). For the last several years, ROP has faced numerous macroeconomic headwinds that appear to be abating, setting up a more promising outlook."
A close-up of a fuel pump operated by a robotic arm, symbolizing the company's technology-driven industrial solutions.
Roper Technologies, Inc. (NASDAQ:ROP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Roper Technologies, Inc. (NASDAQ:ROP) at the end of the fourth quarter compared to 40 in the third quarter. Roper Technologies, Inc.'s (NASDAQ:ROP total revenue grew 12% to $1.9 billion in the first quarter 2025. While we acknowledge the potential of Roper Technologies, Inc. (NASDAQ:ROP) 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.