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Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. For the second consecutive year, U.S. equity indices ended the year with double-digit returns after generating modest returns in the fourth quarter of 2024. Conestoga's investment plans were hindered by the enthusiasm for everything artificial intelligence (AI) related, which the firm believes led to a more speculative investing climate. The Conestoga Small Cap Composite surged 1.67% (net) in the fourth quarter compared to the Russell 2000 Growth Index’s 1.70% return. The Conestoga SMid Cap Composite returned -0.68% (net) trailing the Russell 2500 Growth Index’s 2.43% return. The Conestoga Micro Cap Composite advanced 9.91% (net) vs the Russell Microcap Growth Index’s return of 11.55%. Finally, the Conestoga Mid Cap Composite returned -4.63% (net) underperforming the Russell Midcap Growth Index’s 8.14% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
In its fourth quarter 2024 investor letter, Conestoga Capital Advisors emphasized stocks such as Simpson Manufacturing Co., Inc. (NYSE:SSD). Simpson Manufacturing Co., Inc. (NYSE:SSD) offers wood construction products and pre-fabricated lateral systems for use in construction. The one-month return Simpson Manufacturing Co., Inc. (NYSE:SSD) was 1.55%, and its shares lost 10.28% of their value over the last 52 weeks. On February 10, 2025, Simpson Manufacturing Co., Inc. (NYSE:SSD) stock closed at $166.88 per share, with a market capitalization of $7.036 billion.
Conestoga Capital Advisors stated the following regarding Simpson Manufacturing Co., Inc. (NYSE:SSD) in its Q4 2024 investor letter:
"Simpson Manufacturing Co., Inc. (NYSE:SSD) reported weaker than expected Q3 results amid continued softness in US housing starts. Although Q3 sales were stable, increased costs prompted management to lower its full-year operating margin outlook, citing a slower recovery in storm-affected areas. Strategic investments are ongoing, with recent acquisitions expected to broaden the company's offerings. Focused on cost control and these strategic investments, management aims to restore a 20% operating margin as housing demand improves. We believe, the company's strong balance sheet and operational efficiency initiatives position it well for an eventual housing market recovery."
A worker on a construction site using specialized tools to connect concrete blocks.