Osmium Partners Bets Big on Tech and Internet-Related Stocks

A few days ago, John H Lewis Osmium Partners, presented its Form 13F Filing for the first quarter of 2014 at the U.S. Securities and Exchange Commission. Over the three months ending on March 31, the fund started only 2 new stock positions, increased its stakes in 7 of its preexisting holdings, and sold out of 3 stocks. So, let’s take a look at Mr. Lewis’ portfolio for Q1 2014:

The fund’s strong focus on technology stocks continued through the first quarter, with tech stocks accounting for almost half of its portfolio’s value. Its most valuable position –which remained unchanged in rank in relation to the previous quarter, is that in Rosetta Stone Inc (NYSE:RST), a $209 million market cap provider of technology-based language learning solutions. Osmium raised its stake in Rosetta Stone Inc (NYSE:RST) by 14% during the first three months, and now holds 2.2 million shares -worth more than $24 million, which account for roughly 16% of its portfolio. This position makes of Mr. Lewis the second-largest hedge fund shareholder of the company among funds tracked at Insider Monkey, only surpassed by John W. Rogers’ Ariel Investments, which owns about 3.8 million shares of Rosetta Stone Inc (NYSE:RST), up by 11% in relation to Q4 2013.

Rosetta Stone Inc

The second-runner position, however, changed hands, after the fund slightly boosted its bets on Vitacost.com, Inc. (NASDAQ:VITC) and reduced its exposure to Spark Networks Inc (NYSEMKT:LOV). I should also highlight that Vitacost.com’s stock price surged by more than 22% over the first quarter.

Vitacost.com, Inc. (NASDAQ:VITC) is a $216 million market cap online retailer of health and wellness products. Although it is not strictly a tech stock, this internet retailer does fit in the fund’s tech-and-internet-oriented equity portfolio. Osmium’s 2.75 million shares are worth more than $19 million, and account for approximately 12% of the fund’s portfolio. In this case, Osmium Partners is the hedge fund that holds the largest position in the company, trailed by Chuck Royce’s Royce & Associates, with 2.4 million shares (up by 3%).

I should mention that, after the end of the first quarter, the fund has gone activist on Vitacost.com, Inc. (NASDAQ:VITC), while it continued to trim its stake in the company. After disposing of approximately 250,000 shares, the fund owns 2.5 million shares which account for 7.3% of the total number of shares outstanding. Still, the company has agreed to nominate and appoint an independent director nominated by the fund.

Displaced from its previously held second position, is Spark Networks Inc (NYSEMKT:LOV), a $109 million market cap provider of online personals services, of which the fund owns more than 3.37 million shares, valued at roughly $17 million (about 11% of its portfolio). Once again, Mr. Lewis’ fund is among the largest hedge fund investors of Spark Networks Inc (NYSEMKT:LOV), followed by Thomas Ellis and Todd Hammer’s North Run Capital, which holds 1.85 million shares of the company.

Mr. Lewis’ fourth most valuable holding ascended from the sixth position in the previous quarter. This company is Tucows Inc. (USA) (NASDAQ:TCX) a $154 million market cap provider of internet services such as domain name registration, email and other internet-related services. It sells most of its services through a network of more than 13,000 resellers. During the first quarter, Osmium acquired 23,781 shares of Tucows Inc. (USA) (NASDAQ:TCX), and now holds more than 1 million shares, worth over $13 million, and accounting for 8% of its total equity portfolio.

Disclosure: Javier Hasse holds no position in any stocks mentioned.

 

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