Here's Why OneSpaWorld Holdings Ltd. (OSW) Surged in Q2 Amid Investor Concerns

Ariel Investments, an investment management company, released its “Ariel Small Cap Value Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter witnessed extreme volatility. Stocks declined sharply after the “Liberation Day” tariff announcement and staged a remarkable recovery as the administration initiated a 90-day pause. In the quarter, Ariel Small Cap Value Tax-Exempt Composite appreciated +7.72% gross of fees (+7.58% net of fees) against this backdrop, compared to +4.97% and +8.50% returns of the Russell 2000 Value Index and the Russell 2000 Index, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, the Ariel Small Cap Value Strategy 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 -1.17%, and its shares gained 42.63% of their value over the last 52 weeks. On August 21, 2025, OneSpaWorld Holdings Limited (NASDAQ:OSW) stock closed at $21.95 per share, with a market capitalization of $2.254 billion.

Ariel Small Cap Value Strategy stated the following regarding OneSpaWorld Holdings Limited (NASDAQ:OSW) in its second quarter 2025 investor letter:

"Wellness services provider for cruise ships and destination resorts,OneSpaWorld Holdings Limited (NASDAQ:OSW), was the top contributor to performance in the period. Strong demand for spa services and next generation medi-spa treatments continued to drive robust earnings growth despite investor concerns around a deterioration in consumer sentiment and related softening in discretionary spend. Meanwhile, management is paying down debt and returning capital to shareholders through buybacks and dividends."

OneSpaWorld Holdings Limited (NASDAQ:OSW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held OneSpaWorld Holdings Limited (NASDAQ:OSW) at the end of the second quarter, which was 19 in the previous quarter. While we acknowledge the potential of OneSpaWorld Holdings Limited (NASDAQ:OSW) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered OneSpaWorld Holdings Limited (NASDAQ:OSW) and shared Ariel Appreciation Fund's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 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.