ESCO Technologies (ESE) Climbed Amid Varied Growth Drivers

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Small Cap Composite returned 4.76% in the quarter compared to 11.97% for the Russell 2000 Growth Index. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as ESCO Technologies Inc. (NYSE:ESE). ESCO Technologies Inc. (NYSE:ESE) is a global distributor of engineered filtration and fluid control products and integrated propulsion systems. The one-month return of ESCO Technologies Inc. (NYSE:ESE) was -3.23%, and its shares gained 51.42% of their value over the last 52 weeks. On July 24, 2025, ESCO Technologies Inc. (NYSE:ESE) stock closed at $188.22 per share, with a market capitalization of $4.861 billion.

Conestoga Capital Advisors stated the following regarding ESCO Technologies Inc. (NYSE:ESE) in its second quarter 2025 investor letter:

“ESCO Technologies Inc. (NYSE:ESE): ESE is a diversified industrial that provides diagnostic equipment to utility companies, filtration/flow devices to the aerospace/defense industry and develops testing equipment for the electronics/telecommunication segments. ESE reported strong 1Q results, divested from an underperforming segment, and closed on a well-received acquisition in the defense segment. Also, ESE has benefited from its utility group from the accelerating demand for energy driven by AI.”

Is ESCO Technologies Inc. (ESE) the Best Scientific Instruments Stock to Buy Right Now?

An industrial tech facility with robotic arms for precision machining components.

ESCO Technologies Inc. (NYSE:ESE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 23 hedge fund portfolios held ESCO Technologies Inc. (NYSE:ESE) at the end of the first quarter compared to 12 in the previous quarter. While we acknowledge the risk and potential of ESCO Technologies Inc. (NYSE:ESE) 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 ESCO Technologies Inc. (NYSE:ESE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered ESCO Technologies Inc. (NYSE:ESE) and shared the list of stocks Jim Cramer recently talked about. In addition, please check out our hedge fund investor letters Q2 2025 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.