Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors SMid Cap Strategy trailed the Russell 2500 Growth Index, returning -2.71% vs. 0.33% for the Index. Relative performance fluctuated throughout the quarter. Negative stock selection in Industrials and Real Estate drove underperformance in the quarter, while underweight in the volatile biotechnology industry also impacted relative returns. Nevertheless, positive stock selection in Financials and Basic Materials countered these losses. From a factor standpoint, a “tug-of-war” between high- and low-quality elements lasted throughout the quarter. For the full year, the composite delivered a total return of -4.71% net of fees, compared to the benchmark’s 10.31% return. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks like CSW Industrials, Inc. (NYSE:CSW). CSW Industrials, Inc. (NYSE:CSW) is a diversified industrial growth company that operates in HVAC, plumbing, and engineered building solutions markets. On February 19, 2026, CSW Industrials, Inc. (NYSE:CSW) stock closed at $310.72 per share. One-month return of CSW Industrials, Inc. (NYSE:CSW) was -2.76%, and its shares gained 2.83% over the past 52 weeks. CSW Industrials, Inc. (NYSE:CSW) has a market capitalization of $5.185 billion.
Conestoga Capital Advisors stated the following regarding CSW Industrials, Inc. (NYSE:CSW) in its fourth quarter 2025 investor letter:
“CSW Industrials, Inc. (NYSE:CSW) operates as a diversified industrial growth company with well-established brands in the HVAC, plumbing, and engineered building solutions markets. Despite reporting the first organic decline in twelve quarters in its key Contractor Solutions segment, the weak report was well understood given the challenging residential HVAC equipment sales market in 2025. We believe the stock’s outperformance in the quarter was aided by an early December upgrade by J.P. Morgan as well as the company closing its second large acquisition this year (Motors & Armatures Parts (MARS Parts), which increased the company’s exposure to HVAC repair so it’s less reliant on replacement of equipment.”
CSW Industrials, Inc. (NYSE:CSW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 24 hedge fund portfolios held CSW Industrials, Inc. (NYSE:CSW) at the end of the third quarter, up from 23 in the previous quarter. CSW Industrials, Inc. (NYSE:CSW) consolidated revenue for third quarter of 2026 grew 20% year-over-year to $233 million. While we acknowledge the risk and potential of CSW Industrials, Inc. (NYSE:CSW) 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 CSW Industrials, Inc. (NYSE:CSW) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered CSW Industrials, Inc. (NYSE:CSW) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q4 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.
