OneSpaWorld Holdings: Insider Selling vs. Cruise Wellness Momentum—A Contrarian Buy Signal

Leonard Fluxman, the Executive Chairman and CEO of OneSpaWorld Holdings (NASDAQ: OSW), recently sold $1.48 million of the company’s stock in May 2025. For investors, this move raises eyebrows—insider selling often signals caution. But what if the fundamentals tell a different story? In a market where cruise-linked wellness is booming and OneSpaWorld’s Q1 2025 results shattered estimates, this sale might just be the contrarian trigger to buy.

The Insider Sale: A Pre-Planned Move, Not a Red Flag

Fluxman’s sale was executed under a Rule 10b5-1 trading plan established in November 2024—a pre-arranged, tax-efficient strategy to diversify his portfolio. Crucially, he retains 1.6 million shares, or about 6.5% of OSW’s total float, signaling unwavering belief in the company’s long-term trajectory. As the Q1 earnings report underscored, OneSpaWorld is riding a wave of growth fueled by its dominance in cruise ship wellness centers.

Q1 2025: A Growth Inflection Point

The company reported $219.6 million in revenue, a 4% year-over-year increase, and beat adjusted EPS estimates by 5%. This wasn’t a one-off: OSW has exceeded revenue expectations in four straight quarters, with Q1 2025 marking its highest quarterly revenue in five years. The catalyst? A relentless expansion of its footprint:
- 199 cruise ships under management (up from 193 in 2024), with eight more ships added by year-end.
- $2.3 million in pre-booked revenue from new partnerships, including Norwegian Cruise Line’s Norwegian Aqua.

Even as land-based resorts faced headwinds, cruise revenue surged, proving the company’s strategy to focus on high-margin onboard services is paying off.

Valuation: A Contrarian’s Delight

OSW trades at a forward P/E of 18.5x, well below its five-year average of 22x, despite accelerating growth. Compare this to peer Madison Square Garden (MSGS), which trades at 32x forward earnings, or Steiner Leisure (STNR)—where Fluxman also serves as CEO—trading at 20x. OSW’s valuation discount is irrational given its cruise-centric moat and dividend yield of 2.1%, a rarity in the volatile leisure sector.

Institutional Buying and Share Buybacks: A Contrarian’s Safety Net

While Fluxman sold shares, the company is aggressively buying back its own stock. In Q1 2025 alone, OSW spent $37.9 million repurchasing 2.1 million shares, with a new $75 million authorization approved post-quarter. This underscores management’s confidence. Meanwhile, the Zacks Rank’s “Strong Sell” rating—based on near-term earnings revisions—ignores the high-single-digit revenue growth ($950–970 million for 2025) and expanding EBITDA margins (guidance of $115–125 million).

The Contrarian Play: Buy the Dip, Ride the Cruise Wave

The market may penalize OSW temporarily for Fluxman’s sale, but this is a classic contrarian opportunity. Consider:
1. Cruise Recovery: Post-pandemic demand for luxury experiences is surging. OSW’s 2023 revenue hit $895 million, a 12% jump from 2023, and 2025 guidance implies another 9% rise.
2. Undervalued vs. Peers: At $19.31/share, OSW is priced to perfection. A rerating to 20x forward earnings would send the stock to $28/share—a 45% upside.
3. Dividends and Buybacks: The $0.04 quarterly dividend plus share repurchases create a “buy the dip” safety net.

Final Call: A Cruise Ship Passing by?

Insider selling always sparks doubt, but OSW’s fundamentals—record revenue, cruise expansion, and undervalued peer comparisons—paint a compelling buy case. If the stock retreats post-sale, that’s the contrarian’s moment. The cruise ship of wellness growth isn’t slowing down—investors who board now may capture a multi-year ride.

Action Now: OSW is a buy at $19.31. Set a target of $28/share within 12 months. The cruise is leaving—don’t miss it.