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Is One Group Hospitality (STKS) a Smart Long-term Buy?

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Alex Smith
·4 min read
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Horos Asset Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. Horos Value Internacional has not been immune to this dichotomy of performance, posting a -4.7% return in the quarter, compared to 3.6% of benchmark index. On the other hand, Horos Value Iberia returned -0.8%, outperforming the -6.3% of its benchmark index. You should check out Horos Asset Management's top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Horos Asset Management highlighted a few stocks and One Group Hospitality Inc. (NASDAQ:STKS) is one of them. One Group Hospitality Inc. (NASDAQ:STKS) is a global hospitality company. Year-to-date, One Group Hospitality Inc. (NASDAQ:STKS) stock lost 1.7% and on December 30th it had a closing price of $3.52. Here is what Horos Asset Management said:

"As we highlighted in our previous letter, The ONE Group Hospitality ("ONE") controls, develops, manages and franchises high-end restaurants in the United States. In addition, the company provides turnkey food and beverage solutions to luxury hotels, casinos and other premium locations. In the second quarter, as could be expected, the company’s sales plummeted, ranging from 53% (Kona Grill) to 81% (STK). However, the measures taken before the pandemic by the new management team have allowed ONE to weather the storm and, with the improvement in occupancy in recent weeks and the progressive implementation of food delivery, is even being able to generate cash. Something very commendable and that reinforces our conviction in this investment. In fact, as a result of this “good” business performance the share price rose by 25% in the quarter.

For its part, Tang Palace China Holdings ("Tang Palace") is a company that owns restaurants and food production and service businesses in China. Tang Palace operates under both its own brands and those of third parties through joint ventures. As in the case of ONE, the Asian company has had a very challenging six months, during which sales fell by around 45%. However, the gradual recovery of the business, as well as the company's cost efficiency, allows it to continue generating cash flow in such a difficult environment. This, together with a solid financial position, gives Tang Palace the capacity to withstand the uncertain future."

Pola Damonte/Shutterstock.com

In September 2020, we published an article revealing Horos Asset Management's bullish investment thesis on One Group Hospitality Inc. (NASDAQ:STKS) stock in its Q2 2020 investor letter. This suggests that the investment firm has been bullish for a long time on One Group Hospitality Inc. (NASDAQ:STKS).

Our calculations showed that One Group Hospitality Inc. (NASDAQ:STKS) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

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