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Conestoga Capital Advisors, an asset management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. At its September meeting, the Federal Reserve lowered the Federal Funds rate by 50 basis points due to weaker employment growth and moderate inflation. Equity markets welcomed the news, raising optimism for a soft landing in the U.S. economy. On September 26th, the S&P 500 Index achieved a record high, the Russell 2000 Index also moved higher over the quarter but remains roughly 10% below its all-time high. The Conestoga Small Cap Composite surged 10.09% (net) in the third quarter outperforming the Russell 2000 Growth Index’s 8.41% return. The Conestoga SMid Cap Composite returned 12.94% (net) versus the Russell 2500 Growth Index’s 6.99% return. The Conestoga Micro Cap Composite advanced 7.60% (net) but trailed the Russell Microcap Growth Index’s return of 8.57%. Finally, the Conestoga Mid Cap Composite returned 8.36% (net) outperforming the Russell Midcap Growth Index’s 6.54%. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.
Conestoga Capital Advisors highlighted stocks like West Pharmaceutical Services, Inc. (NYSE:WST), in the third quarter 2024 investor letter. West Pharmaceutical Services, Inc. (NYSE:WST) designs, manufactures, and sells containment and delivery systems for injectable drugs and healthcare products. The one-month return of West Pharmaceutical Services, Inc. (NYSE:WST) was -8.33%, and its shares lost 23.21% of their value over the last 52 weeks. On October 21, 2024, West Pharmaceutical Services, Inc. (NYSE:WST) stock closed at $287.25 per share with a market capitalization of $20.605 billion.
Conestoga Capital Advisors stated the following regarding West Pharmaceutical Services, Inc. (NYSE:WST) in its Q3 2024 investor letter:
“West Pharmaceutical Services, Inc. (NYSE:WST), a market leader in containment and delivery solutions for the pharmaceutical industry, was a laggard for the second straight quarter as the bioprocessing industry continues to suffer from destocking downstream with biopharmaceutical customers. This process has taken longer than expected to normalize, causing WST to lower its revenue and earnings per share for the full year. We believe WST has a favorable market position, but the company ultimately needs supply chains and inventory levels to normalize.”
A closeup of multiple drug containment systems in an array of colors.
West Pharmaceutical Services, Inc. (NYSE:WST) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held West Pharmaceutical Services, Inc. (NYSE:WST) at the end of the second quarter which was 46 in the previous quarter. West Pharmaceutical Services, Inc.’s (NYSE:WST) second-quarter results were below expectations due to ongoing consumer destocking. While we acknowledge the potential of West Pharmaceutical Services, Inc. (NYSE:WST) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.