Conestoga Capital Advisors, a boutique, independent investment management firm, published its fourth-quarter 2020 ‘Small Cap Growth & SMid Cap Growth’ Investor Letter – a copy of which can be downloaded here. A net return of 31% was recorded by Conestoga’s Small Cap Growth fund and 19.72% return by its SMid Cap Growth Fund for the the end year 2020. Both performed below their Russell 2000 Growth and Russell 2500 Growth benchmarks that delivered a 34.63% and 25.89% return respectively. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Conestoga Capital Advisors, in their Q4 2020 investor letter, emphasized that they acquired a position in Simulations Plus, Inc. (NASDAQ: SLP) last year. Simulations Plus, Inc. is a California-based software company that currently has a $1.3 billion market capitalization. For the past 3 months, SLP delivered a 15.46% return, extending its 12-month gains to 86.27%. As of March 5, the stock closed at $66.46 per share.
Here is what Conestoga Capital Advisors has to say about Simulations Plus, Inc. in their Q4 2020 investor letter:
“Based in Lancaster, CA, SLP is a leading provider of simulation and modeling software and consulting services to pharmaceutical and biotechnology companies. SLP is another example of a position that the firm is familiar with due to it being a holding of Conestoga’s Micro Cap strategy. The company’s most recent quarterly report provided a nice entry point for the small cap strategy. While the company reported a solid quarter, the company’s customer retention rate dipped to 88% and its ability to sign up new clients has been diminished by COVID-19. We believe this lower retention rate is a temporary issue and the strength of the business is indicated by management continuing to guide to 15-20% revenue growth for 2021. Similar to other simulation software companies, SLP’s software enables its customers to bring its products to market in a more cost effective and timely manner.”
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Our calculations show that Simulations Plus, Inc. (NASDAQ: SLP) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Simulations Plus, Inc. was in 14 hedge fund portfolios, compared to 10 funds in the third quarter.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
