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Is Axon Enterprise (AXON) A Smart Long-Term Buy?

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Jose Karlo Mari Tottoc
·3 min read
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Conestoga Capital Advisors, a boutique, independent investment management firm, published its fourth-quarter 2020 ‘Small Cap Growth & SMid Cap Growth’ Investor Letter – a copy of which can be downloaded here. A net return of 31% was recorded by Conestoga’s Small Cap Growth fund and 19.72% return by its SMid Cap Growth Fund for the the end year 2020. Both performed below their Russell 2000 Growth and Russell 2500 Growth benchmarks that delivered a 34.63% and 25.89% return respectively. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Conestoga Capital Advisors, in their Q4 2020 investor letter, emphasized that Axon Enterprise, Inc. (NASDAQ: AXON) is among their SMid Cap Growth Fund’s top 5 leaders. Axon Enterprise, Inc. is an Arizona-based company that specializes in designing, and in developing defense weapons for the military, police, civilians and other law enforcement troops. It currently has a $9.1 billion market capitalization. Since the beginning of the year, AXON is up 16.91%, impressively extending its 12-month gains to 116.68%. As of March 5, the stock closed at $143.04 per share.

Here is what Conestoga Capital Advisors has to say about Axon Enterprise, Inc. in their Q4 2020 investor letter:

"AAXN reported third quarter results that were materially ahead of expectations as the company benefitted from continued adoption of body cameras and software tools within police agencies, a surge in Federal bookings, which is a new focus for the company, and continued momentum within the international market. AAXN also introduced 2021 guidance that was ahead of sell-side estimates."

11 Biggest Illegal International Arms Dealers of All Time
11 Biggest Illegal International Arms Dealers of All Time

Copyright: zabelin / 123RF Stock Photo

Our calculations show that Axon Enterprise, Inc. (NASDAQ: AXON) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Axon Enterprise, Inc. was in 32 hedge fund portfolios. AXON delivered a 16.14% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.