Asset management company Conestoga Capital Advisors released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The stock market started a year, thanks to optimism about a strong economy and expectations for inflation and lower interest rates. But fears of slowing revenues at major technology companies, geopolitical tensions and upcoming tariff announcements have caused stocks to fall sharply at the end of the first quarter. Investors seek safety to drive the U.S. Treasury production decline. Conestoga Small Cap Composite in the first quarter returned -11.35% (net) compared to the return of the Russell 2000 growth index. Conestoga Smid Cap composite returned -5.73% compared to the return on the Russell 2500 Growth Index. Conestoga Micro-CAP composite returned -8.24%, while the Russell Microcap growth index returned -17.75%. Ultimately, the Conestoga Mid Cap composite returned 0.96% (net) compared to the return of the Russell Medium Growth Index of -7.12%. Please check the top 5 shares of the fund to better understand their best choice for 2025.
Conestoga Capital Advisors highlighted stocks such as Paylocity Holding Corporation (NASDAQ: PCTY) in its first-quarter 2025 investor letter. Headquartered in Shumbulger, Illinois, Paylocity Holding Corporation (NASDAQ:PCTY) is a software company that provides cloud-based human capital management and payroll software solutions. Paylocity Holding Corporation has a one-month return (NASDAQ:PCTY) of 1.32%, and its stock has accounted for 28.87% of its value over the past 52 weeks. On April 29, 2025, Paylocity Holding Corporation (NASDAQ: PCTY) closed at $192.33 per share, with a market value of $10.749 billion.
Conestoga Capital Advisors noted the following information about Paylocity Holding Corporation (NASDAQ:PCTY) in its 2025 investor letter:
“Headline is located in Arlington Heights, Illinois, PAYLOCITY HOUTH CORPORATION (NASDAQ: PCTY) is a leading cloud salary, human capital management (HCM) and expenditure management solution serving approximately 40,000 clients, primarily in the 100 to 5,000 employee market sector (Conestoga uses PCTY for our own salary core processing). After PYCR acquired through PayChex in January, we added PCTY, a former little hat, seeing an attractive entry point after 4Q market fluctuations. Given PCTY's strong growth trajectory, large amount of recurring revenue, and ongoing margin expansion opportunities, we remain bullish. ”
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Paylocity Holding Corporation (NASDAQ:PCTY) is not among our 30 most popular hedge funds. According to our database, at the end of the fourth quarter, 39 hedge fund portfolios held Paylocity Holding Corporation (NASDAQ:PCTY) at the end of the fourth quarter, compared with 39 in the third quarter. Strong results from Paylocity Holding Corporation (NASDAQ:PCTY) continued in the second quarter of 2025, recurring, with other revenues rising 17%. While we acknowledge the potential of Paylocity Holding Corporation (NASDAQ:PCTY) as an investment, our belief is that AI stocks have greater hope to deliver higher returns and do so in a shorter time frame. If you are looking for AI stocks that are as promising as NVIDIA but have less than 5 times its earnings, check out our report Cheapest AI stocks.
In another article, we introduce Paylocity Holding Corporation (NASDAQ:PCTY) and share the Wasatch Small Cap growth strategy’s perspective on the company. Also, check out our Hedge Fund Investor Letters Q1 2025 page for more investors in hedge funds and other leading investors.
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Disclosure: None. This article was originally published in Insider Monkey.