New York City-based Praesidium Investment Management Company cut its stake in The Descartes Systems Group (DSGX +0.71%) by 206,057 shares in the third quarter, according to a November 14 SEC filing.
What Happened
Praesidium Investment Management Company reported in a U.S. Securities and Exchange Commission (SEC) filing dated November 14 that it reduced its holdings in The Descartes Systems Group (DSGX +0.71%) by 206,057 shares in the third quarter. The estimated net decrease in position value was $22.8 million, bringing the fund’s stake to 251,840 shares valued at $23.7 million as of September 30.
What Else to Know
The fund’s DSGX holding now represents 4.6% of 13F assets, down from 8.2% in the previous quarter.
Top five holdings after the filing:
- NYSE: JBL: $75.8 million (14.8% of AUM)
- NASDAQ: INTA: $71.3 million (13.9% of AUM)
- NASDAQ: FROG: $70.8 million (13.8% of AUM)
- NYSE: NOW: $61.9 million (12.1% of AUM)
- NASDAQ: ALKT: $50.1 million (9.8% of AUM)
As of Tuesday, DSGX shares were priced at $83.36, down 29% over the past year and well underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Market Capitalization | $7.1 billion |
| Revenue (TTM) | $684.8 million |
| Net Income (TTM) | $148.2 million |
| Price (as of market close Tuesday) | $82.51 |
Company Snapshot
- The Descartes Systems Group offers cloud-based logistics and supply chain management solutions, including routing, transportation management, customs compliance, and e-commerce warehouse management.
- The company operates a modular, software-as-a-service (SaaS) platform.
- It serves transportation providers, logistics service providers, manufacturers, retailers, distributors, and mobile business service providers globally.
The Descartes Systems Group is a leading provider of cloud-based logistics and supply chain management software, enabling organizations to optimize delivery, compliance, and trade processes across complex global networks. The company leverages a scalable SaaS model, delivering mission-critical solutions that support operational efficiency and regulatory compliance for logistics-intensive businesses. Its broad customer base and integrated platform position it as a key technology partner in the global logistics ecosystem.
Foolish Take
Praesidium’s latest move seems like it could be a recalibration rather than a retreat. The Descartes Systems Group has continued to post steady revenue and earnings growth, but the fund’s reduced exposure suggests that even consistent operators aren’t immune when portfolio priorities shift—especially after a year in which the stock has badly lagged broader markets. For context, Descartes grew Q2 revenue 10% year over year to $179.8 million, with net income rising 10% to $38 million and operating cash flow jumping 82% to $63.3 million, according to its latest quarterly report.
Still, even solid fundamentals couldn’t offset broader uncertainty around the global trade environment. With shares down 29% over the past year, Descartes has meaningfully underperformed Praesidium’s other top holdings, several of which skew toward higher-growth or more event-driven names. The trimming brings DSGX down to 4.6% of reportable assets—nearly halving its weight from the prior quarter.
For long-term investors, the takeaway is twofold: Descartes remains financially resilient, but sentiment-driven volatility can overshadow fundamentals. Continued margin strength and strong cash generation could provide a stabilizing floor, yet the stock’s muted trajectory means patience is key.
Glossary
13F reportable assets: Assets that institutional investment managers must report quarterly to the SEC on Form 13F.
AUM (Assets Under Management): The total market value of assets that an investment firm manages on behalf of clients.
Top five holdings: The five largest investments in a fund's portfolio, usually by market value or percentage of assets.
Position: The amount of a particular security or investment held by an investor or fund.
Modular platform: Software architecture allowing users to select and combine different functional components based on their needs.
Software-as-a-Service (SaaS): A software delivery model where applications are hosted remotely and accessed via the internet, typically by subscription.
Logistics service providers: Companies that manage the movement, storage, and flow of goods for other businesses.
Customs compliance: Adhering to laws and regulations governing the import and export of goods across international borders.
Mission-critical: Essential systems or processes whose failure would seriously impact business operations.
Integrated platform: A system combining multiple tools or services into a unified solution for users.
Regulatory compliance: Following all laws, rules, and regulations relevant to business operations.
TTM: The 12-month period ending with the most recent quarterly report.
