Asset management firm Conestoga Capital Advisors released its “Small Cap Strategy” investor letter for Q2 2024. A copy of the letter can be downloaded here. Q2 2024 can be considered a moderate period. Economic indicators mainly reflect slower growth and easing inflation. The stock market is also driven by a moderate theme. Large caps as measured by the S&P 500 rose 3.9% in the second quarter, while small caps again lagged, with the Russell 2000 Index down -3.3% and the Russell 2000 Growth Index down -2.9%. The Conestoga Small Cap Aggregate Index fell -5.59% in the second quarter and the Russell 2000 Growth Index down -2.92%. Stock selection was the main reason for the portfolio’s poor performance relative to the index. To get a deeper understanding of our best picks for 2024, check out the fund’s top five holdings.
Conestoga Capital Advisors highlighted stocks such as SPX Technologies, Inc. (NYSE:SPXC) in their Q2 2024 investor letter. SPX Technologies, Inc. (NYSE:SPXC) sells infrastructure equipment for the HVAC and detection and measurement markets. SPX Technologies, Inc. (NYSE:SPXC) saw a one-month return of -2.16% and shares rose 85.99% over the past 52 weeks. On August 13, 2024, SPX Technologies, Inc. (NYSE:SPXC) shares closed at $149.74 per share, giving the company a market capitalization of $6.932 billion.
In its Q2 2024 investor letter, Conestoga Capital Advisors said the following about SPX Technologies, Inc. (NYSE:SPXC):
“SPX Technologies, Inc. (NYSE:SPXC): Based in Charlotte, North Carolina, SPXC is a supplier of infrastructure equipment across two segments: Heating, Ventilation and Air Conditioning (HVAC) and Detection and Measurement (D&M). Through acquisitions and divestitures, SPXC has transformed into a business focused on high margin, attractive growing niche solutions that are highly engineered, premium priced and have achieved market leading positions through innovation and a large installed base. We believe this is an enduring business that can accelerate growth through organic revenue, complementary acquisitions and consistent margin improvement while maintaining a strong balance sheet.”
An engineer adjusts a robotic arm on a factory line to control an artificial air-moving solution.
SPX Technologies, Inc. (NYSE:SPXC) is not included in our list of the 31 most popular stocks among hedge funds. According to our database, 19 hedge fund portfolios held SPX Technologies, Inc. (NYSE:SPXC) at the end of the first quarter, up from 14 in the previous quarter. In the second quarter, SPX Technologies, Inc. (NYSE:SPXC) saw revenues grow 18.4% year over year, and adjusted EBITDA increased 45%. While we see potential in SPX Technologies, Inc. (NYSE:SPXC) as an investment, we believe AI stocks offer a better chance of delivering higher returns in the short term. If you are looking for AI stocks that are as promising as NVIDIA but trade at less than 5x, check out our report on the cheapest AI stocks.
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In another article, we covered SPX Technologies, Inc. (NYSE:SPXC) and shared a list of industrial stocks that are already riding the AI wave. Additionally, you can find more investor letters from hedge funds and other leading investors on our Q2 2024 Hedge Fund Investor Letters page.
Read next: Michael Burry sells these stocks and a new dawn dawns for US stocks.
Disclosures: None. This article was originally published on Insider Monkey.
