Conestoga Capital Advisors, an asset management company, released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The letter reports a positive market shift towards Small Caps, with the Russell 2000 Index achieving its best first half since 1991 and the Russell 2000 Growth Index up 25.7% in Q2, fueled by AI enthusiasm and semiconductor stocks. However, market leadership was uneven, mirroring the Tech Bubble: high-beta stocks outperformed while high-quality companies lagged, affecting Conestoga’s quality-focused strategies. Management expressed confidence in long-term outcomes, noting that speculative leadership won’t last as monetary policy tightens and market breadth improves. The firm remains committed to high-quality growth businesses, expecting these to regain favor as leadership broadens. The Conestoga Micro-Cap Composite achieved a solid second quarter with a 22.16% net return, although it underperformed the Russell Microcap Growth Index’s 28.98% return. During this period, Micro-Cap Growth surpassed all major equity benchmarks, which reflects improved investor sentiment towards smaller-cap stocks, but the gains were primarily driven by a limited set of high-beta, high-momentum stocks. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Conestoga Capital Advisors highlighted N-able, Inc. (NYSE:NABL). N-able, Inc. (NYSE:NABL), a technology company offering unified endpoint management, security operations, and data protection solutions for managed service providers, was exited from the Conestoga Micro-Cap Composite during the quarter. On August 06, 2026, N-able, Inc. (NYSE:NABL) closed at $4.87 per share. One-month return of N-able, Inc. (NYSE:NABL) was 15.13%, and its shares lost 34.89% over the past 52 weeks. N-able, Inc. (NYSE:NABL) has a market capitalization of $917.4 million.
Conestoga Capital Advisors stated the following regarding N-able, Inc. (NYSE:NABL) in its Q2 2026 investor letter:
“N-able, Inc. (NYSE:NABL) provides cloud-based IT management, cybersecurity, and data protection software to managed service providers. We exited the position as we became more selective within the software sector, despite the company’s continued operational execution. While N-able remains well positioned to benefit from growing cybersecurity demand and AI-enabled product innovation, we believe the portfolio’s software exposure could be better concentrated in businesses with stronger long-term growth and return potential.”
N-able, Inc. (NYSE:NABL) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 25 hedge fund portfolios held N-able, Inc. (NYSE:NABL) at the end of the first quarter, compared to 28 in the previous quarter. While we acknowledge the risk and potential of N-able, Inc. (NYSE:NABL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than N-able, Inc. (NYSE:NABL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered N-able, Inc. (NYSE:NABL) and shared a list of best value penny stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
