Montrose Environmental Group (MEG) Rallied in the Second Consecutive Quarter

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Micro Cap Composite appreciated 15.65% net-of-fees in the second quarter but underperformed the Russell Microcap Growth Index’s 20.92% return. In a highly volatile market led by high-beta and lower-quality stocks, the firm does not expect the fund to align with index performance. Please review the fund's top 5 holdings to gain insight into their key selections for 2025.

In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Montrose Environmental Group, Inc. (NYSE:MEG). Montrose Environmental Group, Inc. (NYSE:MEG) is an environmental services company. The one-month return of Montrose Environmental Group, Inc. (NYSE:MEG) was 7.08%, and its shares lost 23.85% of their value over the last 52 weeks. On July 25, 2025, Montrose Environmental Group, Inc. (NYSE:MEG) stock closed at $23.44 per share, with a market capitalization of $802.028 million.

Conestoga Capital Advisors stated the following regarding Montrose Environmental Group, Inc. (NYSE:MEG) in its second quarter 2025 investor letter:

"Montrose Environmental Group, Inc. (NYSE:MEG) is a pure play environmental services company that offers end-to-end solutions for addressing environmental issues. This is the second quarter in a row the stock traded up sharply on quarterly results. While there has been a persistent overhang on the stock from environmental deregulation concerns, the company continues to execute its long-range plan of high single digit organic growth."

Montrose Environmental Group, Inc. (NYSE:MEG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Montrose Environmental Group, Inc. (NYSE:MEG) at the end of the first quarter, compared to 17 in the previous quarter. Montrose Environmental Group, Inc.’s (NYSE:MEG) first quarter revenue increased 14.5% to $177.8 million. While we acknowledge the potential of Montrose Environmental Group, Inc. (NYSE:MEG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Montrose Environmental Group, Inc. (NYSE:MEG) and shared Baron Discovery Fund's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2025 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.