Conestoga Capital Advisors, an asset management company, recently released its first-quarter 2025 investor letter. The letter highlighted the performance of their various composite funds in the first quarter, with mixed results across different market segments. The Conestoga Small Cap Composite returned -11.35%, the Conestoga SMid Cap Composite returned -5.73%, the Conestoga Micro-Cap Composite returned -8.24%, and the Conestoga Mid Cap Composite returned 0.96%. Despite the challenging market conditions, Conestoga Capital Advisors remains optimistic about their investment strategies.
One of the stocks that Conestoga Capital Advisors mentioned in their investor letter is Paylocity Holding Corporation (NASDAQ:PCTY). Paylocity is a software company that provides cloud-based human capital management and payroll software solutions. The stock has performed well, with a one-month return of 1.32% and a 52-week gain of 28.87%. As of April 29, 2025, Paylocity Holding Corporation’s stock closed at $192.33 per share, with a market capitalization of $10.749 billion.
In their investor letter, Conestoga Capital Advisors expressed bullishness on Paylocity Holding Corporation, citing the company’s strong growth trajectory, substantial recurring revenue, and margin expansion opportunities. They added Paylocity to their portfolio after seeing an attractive entry point following market volatility in the fourth quarter. The company serves approximately 40,000 clients in the 100 to 5,000 employee market segments and has shown resilience in the face of economic challenges.
While Paylocity Holding Corporation is not among the 30 most popular stocks among hedge funds, it has continued to deliver strong results. In the fiscal second quarter of 2025, the company saw growth in recurring and other revenue by 17%. However, Conestoga Capital Advisors believes that AI stocks hold greater promise for higher returns in a shorter timeframe. They recommend exploring AI stocks that trade at a discount compared to their earnings, such as NVIDIA.
For more insights on Paylocity Holding Corporation and other investment opportunities, readers can check out related articles on Insider Monkey’s website. The platform covers a wide range of topics, including hedge fund investor letters, stock analysis, and market trends. Readers can also explore articles on notable investors like Michael Burry and emerging trends in the US stock market.
In conclusion, Conestoga Capital Advisors’ investor letter provides valuable insights into their investment strategies and the performance of companies like Paylocity Holding Corporation. Despite market challenges, the company remains optimistic about the potential for growth and profitability in their portfolio. Investors can use this information as a reference for making informed decisions about their own investment portfolios.
