Here’s Why Conestoga Capital Advisors Sold Neogen Corp. (NEOG)

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 Neogen Corporation (NASDAQ:NEOG). Neogen Corporation (NASDAQ:NEOG) engages in the development of various products and services dedicated to food and animal safety. The one-month return of Neogen Corporation (NASDAQ:NEOG) was 9.21%, and its shares lost 69.83% of their value over the last 52 weeks. On July 25, 2025, Neogen Corporation (NASDAQ:NEOG) stock closed at $5.22 per share, with a market capitalization of $1.133 billion.

Conestoga Capital Advisors stated the following regarding Neogen Corporation (NASDAQ:NEOG) in its second quarter 2025 investor letter:

“Neogen Corporation’s (NASDAQ:NEOG) FY3Q results continued a string of disappointing quarters. The company also lowered FY4Q guidance. Additionally, the company announced a search for a new CEO. The continued fundamental 3M food safety integration challenges, end market weakness, and management changes caused us to exit the stock during the quarter. The company still has the manufacturing transition of a major product, Petrifilm, to execute and the change in CEO may cause some significant organizational disruption.

Originally purchased in 2007, NEOG has struggled over the past several years with the large integration of 3M Co.’s food safety business and several management changes. We have visited the company onsite and spoken to management numerous times over the past year, and we have determined that the stock no longer meets our long-term growth expectations.”

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A research laboratory showing advanced diagnostic equipment used to protect public health.

Neogen Corporation (NASDAQ:NEOG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 15 hedge fund portfolios held Neogen Corporation (NASDAQ:NEOG) at the end of the first quarter compared to 15 in the previous quarter. While we acknowledge the risk and potential of Neogen Corporation (NASDAQ:NEOG) 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 Neogen Corporation (NASDAQ:NEOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Neogen Corporation (NASDAQ:NEOG) and shared the list of top falling stocks with unusual volume. 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.