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Optimism Kept OneSpaWorld Holdings (OSW) in FAM Funds’ Holdings

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FAM Funds, an investment management firm, published its ‘FAM Small Cap Fund’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 10.10% was recorded by the fund for the year end 2020, underperforming its Russell 2000 benchmark that returned 19.9%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

FAM Funds, in their Q4 2020 Investor Letter said that they acquired a position in OneSpaWorld Holdings Limited (NASDAQ: OSW), and continuously holds the company despite being tremendously devastated by the pandemic. OneSpaWorld Holdings Limited is a multinational operator of health and wellness centers on cruise ships and resorts globally, that currently has an $848 million market cap. For the past 3 months, OSW delivered a decent 60.87% return and settled at $9.82 per share at the closing of January 28th.

Here is what FAM Funds has to say about OneSpaWorld Holdings Limited in their investor letter:

"In late January, we introduced a new idea into the Fund — OneSpaWorld (OSW). In hindsight, this move was unfortunate. OSW’s primary business lies in managing spas on cruise ships, almost all of which outsource spa services. OSW dominates the business with more than 90% market share and is typically highly profitable. Historically, OSW grew through recessions and past virus outbreaks like H1N1, SARS, and MERS, as cruise ship owners slashed ticket prices to keep their vessels full. At the time of our purchase, COVID-19 looked, to us, comparable to past viruses. By the time it was clear that it was a serious threat to the industry, the stock price had collapsed. While both frustrated and disappointed, we decided that the right course of action was to hold our position. We believe that, eventually, the public will resume cruising and OSW should benefit. As optimism grew in the second half of the year about the potential for improved cruising conditions, the stock price partially rebounded."

Most Expensive Cruises in the World
Most Expensive Cruises in the World

Last December 2020, we published an article telling that OneSpaWorld Holdings Limited (NASDAQ: OSW) was in 10 hedge fund portfolios. Its all time high statistics is 15. OSW delivered a -33.51% return in the past 12 months.

Our calculations show that OneSpaWorld Holdings Limited (NASDAQ: OSW) does not belong in our list of 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.