Michigan-based investment advisor Cedar Grove Capital Management recently released its first quarter 2026 investor letter. A copy of the letter can be downloaded here. Cedar Grove Capital Management's Multi-Strategy Composite posted a -23.0% net return since inception, compared to -5.6% for the Russell 2000, -5.9% for the Russell Microcap, and -5.5% for the S&P 500.
Timing is key for early fund success, yet predicting external shocks during volatile macroeconomic periods is impossible. Rather than speculate on macro risks, it's advisable to invest in strong companies at reasonable prices with good growth prospects. The recent downturn, called a "SaaS apocalypse," was an opportunity to buy quality stocks that were undervalued despite better fundamentals and potential AI-driven gains.
In February and early March, nearly all portfolio holdings reported strong earnings. However, the outbreak of war in Iran quickly overshadowed these gains, causing a rapid market selloff. While macro factors hurt performance in Q1, the firm is confident that its companies will do well in Q2 and beyond.
In addition, please check the Strategy's top five holdings to know its best picks in 2026. In its first-quarter 2026 investor letter, Cedar Grove Capital Management 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.
On April 16, 2026, OneSpaWorld Holdings Limited (NASDAQ:OSW) closed at $24.08 per share. One-month return of OneSpaWorld Holdings Limited (NASDAQ:OSW) was 14.78%, and its shares gained 42.15% over the past 52 weeks. OneSpaWorld Holdings Limited (NASDAQ:OSW) has a market capitalization of $2.44 billion.
Cedar Grove Capital Management stated the following regarding OneSpaWorld Holdings Limited (NASDAQ:OSW) in its Q1 2026 investor letter: "OneSpaWorld Holdings Limited (NASDAQ:OSW) is one of the very few names that we revisit from time to time as more of a trade than an investment for us. OSW is a spa operator that largely operates its business on various cruise lines (Carnival Cruise, Norwegian, etc). The reason we trade this name from time to time is that it still consistently gets misunderstood by the market in times of turmoil that mainly affect cruise lines directly, rather than OSW — think rising oil prices or a reduction in consumer discretionary spending.
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