Core Insights - Conestoga Capital Advisors reported that equity markets reached new all-time highs in Q3 2025, but their Small Cap Composite underperformed the Russell 2000 Growth Index, returning -1.4% compared to the Index's 12.2% gain [1] - The gains in the Index were primarily driven by low-quality stocks, particularly unprofitable, high-beta names [1] Company Performance - Novanta Inc. (NASDAQ:NOVT) experienced a one-month return of -6.45% and a significant 39.50% decline in value over the past 52 weeks, closing at $105.56 per share with a market capitalization of $3.797 billion on October 17, 2025 [2] - The company reported revenue of $241 million in Q2 2025, reflecting a growth of 2% but a 2% decline in organic revenue [4] Market Sentiment - Novanta Inc.'s stock underperformed due to disappointing revenue growth and a cautious outlook for med-tech capital equipment, which negatively impacted investor sentiment [3] - The stock's performance was further affected by skepticism regarding near-term acceleration, despite some results beating EPS expectations [3] Hedge Fund Interest - Novanta Inc. was held by 27 hedge fund portfolios at the end of Q2 2025, a decrease from 31 in the previous quarter, indicating reduced interest among hedge funds [4] - While Novanta Inc. has potential as an investment, there is a belief that certain AI stocks may offer better upside potential with less downside risk [4]