Palomar Holdings (PLMR) Surged on Robust Results

Soumya Eswaran

Wed, Apr 30, 2025, 6:45 AM 3 min read

Conestoga Capital Advisors, an asset management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets started the year with a rally due to optimism about a strong economy and expectations of moderating inflation and lower interest rates. However, concerns over slowing earnings from major Technology companies, geopolitical tensions, and an upcoming announcement on tariffs led to a sharp decline in equities by the end of the first quarter. Investors sought safety, driving U.S. Treasury yields down. The Conestoga Small Cap Composite returned -11.35% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. The Conestoga SMid Cap Composite returned -5.73% compared to the Russell 2500 Growth Index’s -10.80% return. The Conestoga Micro-Cap Composite returned -8.24% vs the Russell Microcap Growth Index’s return of -17.75%. Finally, the Conestoga Mid Cap Composite returned 0.96% (net), compared to the Russell Midcap Growth Index’s -7.12% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its first-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Palomar Holdings, Inc. (NASDAQ:PLMR). Palomar Holdings, Inc. (NASDAQ:PLMR), with a market capitalization of $3.954 billion, is a specialty insurance company. The one-month return of Palomar Holdings, Inc. (NASDAQ:PLMR) was 6.76%, and its shares gained 88.01% of their value over the last 52 weeks. On April 29, 2025, Palomar Holdings, Inc. (NASDAQ:PLMR) stock closed at $147.91 per share.

Conestoga Capital Advisors stated the following regarding Palomar Holdings, Inc. (NASDAQ:PLMR) in its Q1 2025 investor letter:

"After a strong 2024, shares of Palomar Holdings, Inc. (NASDAQ:PLMR) appreciated during the first quarter as the company’s results remain robust. PLMR reported its ninth consecutive earnings beat during the quarter as organic growth remained robust across the firm’s insurance portfolio. PLMR should grow revenue by greater than 20% in 2025. Core earthquake lines of business remain dislocated (good for PLMR) and PLMR is gaining momentum in inland marine, crop, and niche property markets. In addition, PLMR has near industry leading margins with an adjusted combined ratio in the low-70’s."

Palomar Holdings, Inc. (NASDAQ:PLMR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Palomar Holdings, Inc. (NASDAQ:PLMR) at the end of the fourth quarter, compared to 24 in the third quarter. While we acknowledge the potential of Palomar Holdings, Inc. (NASDAQ:PLMR) 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.