Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, investors fled to shelter as hopes for another year of U.S. outperformance, driven by economic momentum and the new administration's pro-business approach swiftly gave way to tariff fears and policy uncertainty, causing most of the major U.S. indices to close the quarter in the red. Against this backdrop, the fund returned -6.94% in the first quarter underperforming the Russell Midcap Value Index’s -2.11% returns, and the Russell Midcap Index’s -3.40% returns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Ariel Appreciation Fund highlighted stocks such as OneSpaWorld Holdings Limited (NASDAQ:OSW). OneSpaWorld Holdings Limited (NASDAQ:OSW) operates health and wellness centers onboard cruise ships and at destination resorts. The one-month return of OneSpaWorld Holdings Limited (NASDAQ:OSW) was -9.21%, and its shares gained 32.50% of their value over the last 52 weeks. On February 28, 2025, OneSpaWorld Holdings Limited (NASDAQ:OSW) stock closed at $16.47 per share with a market capitalization of $1.773 billion.

Ariel Appreciation Fund stated the following regarding OneSpaWorld Holdings Limited (NASDAQ:OSW) in its Q1 2025 investor letter:

"We initiated two positions in the leisure and travel industry, cruise ship operator, Norwegian Cruise Line Holdings Ltd. (NCLH) and global health and wellness provider onboard cruise ships and destination resorts, OneSpaWorld Holdings Limited (NASDAQ:OSW). Shares of both companies traded meaningfully lower on investor concerns around a deterioration in consumer sentiment and related softening in discretionary spend due to the economic slowdown. A potential new tax on cruise lines also weighed on NCLH’s shares. In our view, these risks are currently priced in and present an attractive entry point. Notably, consumer demand and booking trends remain strong and both companies continue to deliver robust earnings growth. OSW’s management continues to work to strengthen its balance sheet by paying down debt and returning capital to shareholders through buybacks and dividends."

A well-equipped wellness center with classes and health services.

OneSpaWorld Holdings Limited (NASDAQ:OSW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held OneSpaWorld Holdings Limited (NASDAQ:OSW) at the end of the fourth quarter compared to 25 in the third quarter. OneSpaWorld Holdings Limited (NASDAQ:OSW) fourth quarter revenue increased 11% to $217.2 million compared to $194.8 million in Q4 2023. While we acknowledge the potential of OneSpaWorld Holdings Limited (NASDAQ:OSW) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Story Continues

In another article, we covered OneSpaWorld Holdings Limited (NASDAQ:OSW) and shared the list of best cruise stocks to buy according to hedge funds. OneSpaWorld Holdings Limited (NASDAQ:OSW) appreciated during the last quarter, boosting the Ariel Small Cap Value Strategy's performance. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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

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