Reason for the Decline of Model N (MODN) in 2023
Conestoga Capital Advisors, an asset management company, released its “Small Cap Strategy” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In 2023, the Small Cap Composite outperformed the Russell 2000 Growth Index benchmark and returned 21.93% versus the benchmark’s return of 18.66%. The strategy rose 10.97% net-of-fees in the fourth quarter compared to the 12.75% return for the index. As anticipated, the strategy produced the majority of its outperformance during the down-market times. In general, 2023 had mixed results for better-caliber businesses. Sector allocations contributed more to Conestoga’s relative performance in the Small Cap Composite than stock selection effects did. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Conestoga Capital Advisors Small Cap Strategy featured stocks such as Model N, Inc. (NYSE:MODN) in the fourth quarter 2023 investor letter. Headquartered in San Mateo, California, Model N, Inc. (NYSE:MODN) provides revenue management cloud solutions for the life science and technology industries. On February 16, 2024, Model N, Inc. (NYSE:MODN) stock closed at $25.77 per share. One-month return of Model N, Inc. (NYSE:MODN) was -7.24%, and its shares lost 27.04% of their value over the last 52 weeks. Model N, Inc. (NYSE:MODN) has a market capitalization of $1.006 billion.
Conestoga Capital Advisors Small Cap Strategy stated the following regarding Model N, Inc. (NYSE:MODN) in its fourth quarter 2023 investor letter:
"Stock selection was most challenging in the Technology sector. While the vast majority of our holdings (which totaled 13 over the year) in this sector produced returns similar or better to the Index, several names lagged. Model N, Inc. (NYSE:MODN) was the weakest performer, giving back its strong 2022 returns over the course of 2023 as lofty Street expectations for the growth of its cloud-based revenue management services for high-tech and biopharma companies proved difficult to achieve."
A closeup of a software engineer architecting a cutting-edge Global Pricing Management application.
Model N, Inc. (NYSE:MODN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Model N, Inc. (NYSE:MODN) was held by 17 hedge fund portfolios, down from 21 in the previous quarter, according to our database.
We discussed Model N, Inc. (NYSE:MODN) in another article and shared Conestoga Capital Advisors' views on the company. In addition, please check out our hedge fund investor letters Q4 2023 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.
