Quarterly Commentary

1Q 2024


  • In 1Q24, the Russell 2000 Growth returned 7.58%, the Russell 2000 returned 5.18% and the S&P 500 returned 10.56%.
  • Inflation in January and February was over 3.0%, above the Federal Reserve’s 2.0% target.1
  • Expectations for GDP growth increased slightly in 1Q24. At the beginning of the year, the Atlanta Fed’s consensus of Blue-Chip economists was 1% for 1Q24 GDP. By the end of March, estimates were over 2%, which still represents a slowdown from 4Q23’s GDP growth of 3.4%.2
  • In 1Q24 the Federal Reserve held rates at 5.25-5.50% and indicated that it needed to see progress toward its 2% inflation target before cutting rates. In late March, the market rallied as the Fed indicated it still forecasts three rate cuts in 2024, despite the surprising pickup in inflation in January and February.
  • 10-year Treasury yields increased to 4.2% in March, from 3.9% on December 29. In October 2023, the 10-year hit 5.0%, which was the highest level since 2007.



  • In 1Q24, the Fund’s Institutional (NEAIX) and Retail (NEAGX) classes returned 18.74% and 18.58%, respectively, significantly outperforming the Russell 2000 Growth and Russell 2000.
  • The Fund’s top contributors were:
    • Super Micro Computer, Inc. (SMCI) experienced strong growth in 4Q23 and guidance for 1Q24. Super Micro was added to the S&P 500 in March. It raised $3.5 billion from an equity and convertible debt offering during the quarter. Super Micro is now frequently in the press with all kinds of opinions offered. The Fund has owned SMCI since 2009.
    • Vertiv Holdings Co. Class A (VRT) supplies systems for power and thermal management for data centers.
    • CRA International, Inc. (CRAI) performs consulting services including Antitrust & Competition Economics, Energy, and Forensic Services.
  • The Fund’s top detractor in 1Q24 was Vicor Corporation (VICR). Vicor manufactures power conversion chips used in data centers, cars, and other industrial products. We have been awaiting the opening of Vicor’s new plant in Andover, MA, and we believe it will start to contribute in 2024. The plant delays limited capacity and hurt earnings over the last year. In 1Q24, Vicor reported disappointing guidance and the loss of an important customer. We believe the market is moving in Vicor’s direction with the high-power requirements of EVs and data centers. Thus, we wait with patience for Vicor to produce better results.
  • With 12% turnover, the Fund does not rotate into or out of sectors but invests in companies we believe can outperform over the long term.


  • Once again, the Fund had significant inflows in the quarter. It ended the quarter with a 19% cash position, down from 22% on December 29. We had a productive quarter with additions to existing positions and seven new investments.
  • The three largest new holdings are:
    • Vital Farms, Inc. (VITL) is a Certified B Corporation that offers a range of ethically produced eggs, across the U.S. We were impressed by the company at its July 2020 IPO but felt the $22 IPO price was too expensive. The company has performed well over the last 2 ½ years and we were able to build a position for approximately $16/ share.
    • Ecovyst Inc. (ECVT) is a specialty chemical company that serves the chemical, refining, industrial and mining industries. It went public in 2017 at $17.50 per share and has suffered from its former private equity owners selling stock. This overhang is almost completed and we were able to build the Fund’s position at under $10/ share.
    • Astronics Corporation (ATRO) supplies electrical systems, primarily to the aviation industry. The business was hurt badly by COVID and the balance sheet suffered. We are impressed by Astronics’ important customer orders. We believe Astronics is within a quarter or two of generating cash from working capital, which will position the company for growth.
  • Major additions:
    • The Fund’s largest additions were to Asure Software, Inc. (ASUR), and to the Fund’s long-time holdings Vicor Corp. and PDF Solutions Inc. (PDFS). Asure was a new holding in 4Q23 and offers payroll services for small businesses. It services 1.2 million employees and has many growth opportunities, including payroll, tax, 401(k) administration, HR compliance, float, and the Asure Marketplace.
  • Reduced position:
    • We sold 7% of the Fund’s holding in Super Micro to manage the position size.


  • Our major investment theme remains the importance of U.S. infrastructure—the lesser known “pick and shovel” providers. Our companies sell into data centers, life sciences labs, semiconductor and other manufacturing plants, roads, airports, airbases, power plants, and more.
  • The U.S. has underinvested in these areas, so there could be long tail winds.
  • I’d like to highlight four areas present throughout our investments:
    • Semiconductor manufacturing
    • Data Centers/AI processing
    • U.S. Manufacturing
    • Defense technology
  • We believe the AI buildout is still in an early stage. Economic returns on AI projects could be a big deal for productivity and the economy. We are hearing from companies about increases in sales from the application of AI.