Descartes Stock Down 29% in a Year — Is That Why a Major Investor Just Cut Its Stake?

New York City-based Praesidium Investment Management Company cut its stake in The Descartes Systems Group (NASDAQ:DSGX) 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 (NASDAQ:DSGX) 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

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.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Descartes Systems Group, Intapp, and ServiceNow. The Motley Fool recommends JFrog. The Motley Fool has a disclosure policy.