Here's Why Conestoga Capital Advisors Sold Mesa Laboratories (MLAB)

Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net-of-fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile in the quarter. The “low quality” stocks rally persisted in the quarter, but at a slower pace compared to earlier quarters. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors featured stocks such as Mesa Laboratories, Inc. (NASDAQ:MLAB). Mesa Laboratories, Inc. (NASDAQ:MLAB) is a comprehensive provider of life sciences tools, quality control products, and services. One-month return of Mesa Laboratories, Inc. (NASDAQ:MLAB) was 11.32%, and its shares lost 35.06% of their value over the last 52 weeks. On February 19, 2026, Mesa Laboratories, Inc. (NASDAQ:MLAB) stock closed at $92.02 per share, with a market capitalization of $508.393 million.

Conestoga Capital Advisors stated the following regarding Mesa Laboratories, Inc. (NASDAQ:MLAB) in its fourth quarter 2025 investor letter:

"Mesa Laboratories, Inc. (NASDAQ:MLAB) provides quality-control instruments, consumables, and services to regulated industries, including life sciences and healthcare. MLAB represented a small position within the small-cap strategy and we lacked sufficient conviction in the company’s long-term growth prospects to increase our exposure. Consequently, we exited the position. The company’s operating results have been pressured by end-market weakness, particularly in cell and gene therapy and in China. In addition, MLAB’s acquisition strategy—especially within clinical genomics— has not delivered the growth we initially anticipated. With limited organic growth opportunities and a balance sheet that constrains further acquisitions, we believe MLAB’s overall growth prospects remain limited."

Mesa Laboratories, Inc. (NASDAQ:MLAB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 20 hedge fund portfolios held Mesa Laboratories, Inc. (NASDAQ:MLAB) at the end of the third quarter, up from 12 in the previous quarter. While we acknowledge the potential of Mesa Laboratories, Inc. (NASDAQ:MLAB) 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 Mesa Laboratories, Inc. (NASDAQ:MLAB) and shared Diamond Hill Capital Small Cap Strategy's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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