Conestoga Capital Advisors, an asset management company, released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The first quarter of 2026 began with optimism about the domestic economy and attractive Small Cap valuations, but was impacted by volatility from Middle East geopolitical unrest and changing interest rate expectations. This unrest drove energy prices up and created cautious global markets. Energy, Basic Materials, and Industrials performed well, while software companies faced challenges due to AI disruption concerns. Market sensitivity to geopolitical events, energy prices, and inflation remains high. The Conestoga Small Cap Composite fell 5.01%, underperforming the Russell 2000 Growth’s -2.81% return. The decline was driven by negative stock selection and headwinds in Technology and Health Care, with sector allocation benefits insufficient to offset losses. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Conestoga Capital Advisors highlighted Helios Technologies, Inc. (NYSE:HLIO) as a notable contributor. Helios Technologies, Inc. (NYSE:HLIO) is an engineering motion control and electronic controls technology solutions company. On April 27, 2026, Helios Technologies, Inc. (NYSE:HLIO) closed at $69.18 per share. One-month return of Helios Technologies, Inc. (NYSE:HLIO) was 6.91%, and its shares gained 147.42% over the past 52 weeks. Helios Technologies, Inc. (NYSE:HLIO) has a market capitalization of $2.29 billion.
Conestoga Capital Advisors stated the following regarding Helios Technologies, Inc. (NYSE:HLIO) in its Q1 2026 investor letter:
“Helios Technologies, Inc. (NYSE:HLIO) manufactures motion control and electronic control solutions for industrial applications. Shares moved higher as the business began to show signs of stabilization following a period of pressure, with improving volumes driving better cost absorption. That dynamic supported a meaningful improvement in profitability, including a 350 basis point expansion in gross margin. Investors appeared to be positioning for a cyclical recovery as fundamentals inflect and operational execution improves. The changes the new CEO has made in the last 12 months have improved the operating and financial results of the company.”
Helios Technologies, Inc. (NYSE:HLIO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 23 hedge fund portfolios held Helios Technologies, Inc. (NYSE:HLIO) at the end of the fourth quarter, up from 17 in the previous quarter. In the fourth quarter of 2025, Helios Technologies, Inc. (NYSE:HLIO) revenue grew 17% year-over-year to $211 million. While we acknowledge the risk and potential of Helios Technologies, Inc. (NYSE:HLIO) 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 Helios Technologies, Inc. (NYSE:HLIO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Helios Technologies, Inc. (NYSE:HLIO) and shared the list of best industrial machinery and supplies stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 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.
