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Here’s Why Digi International (DGII) Fell in Q4

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 Digi International Inc. (NASDAQ:DGII) in the fourth quarter 2023 investor letter. Headquartered in Hopkins, Minnesota, Digi International Inc. (NASDAQ:DGII) offers business and Internet of Things products and services. On February 16, 2024, Digi International Inc. (NASDAQ:DGII) stock closed at $30.42 per share. One-month return of Digi International Inc. (NASDAQ:DGII) was 28.57%, and its shares lost 11.83% of their value over the last 52 weeks. Digi International Inc. (NASDAQ:DGII) has a market capitalization of $1.103 billion.

Conestoga Capital Advisors Small Cap Strategy stated the following regarding Digi International Inc. (NASDAQ:DGII) in its fourth quarter 2023 investor letter:

"Digi International Inc. (NASDAQ:DGII): DGII provides mission-critical Internet of Things connectivity products, services, and solutions. DGII reported September quarter results that were above expectations but missed December estimates. The miss was mainly driven by larger customers extending deployment times with DGII given the uncertain economic environment. Management provided fiscal year 2024 guidance which calls for revenues to be flat and annual recurring revenue (ARR) and adjusted EBITDA to grow 5% on an annualized basis. The company also updated their financial goals to $200M in ARR and adjusted EBITDA in a five-year time frame."

A close-up of a cellular router being tested and debugged in a laboratory setting.

Digi International Inc. (NASDAQ:DGII) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Digi International Inc. (NASDAQ:DGII) was held by 10 hedge fund portfolios, down from 13 in the previous quarter, according to our database.

We discussed Digi International Inc. (NASDAQ:DGII) in another article and shared Mairs & Power Small Cap Fund's 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.