In this article, we will discuss the 10 best hair care stocks to buy now.
Last year, the hair care and beauty industries took a wavy path as the world implemented a lockdown, resulting in widespread retail and salon store closures and a decrease in global sales of numerous beauty and personal care products. With the stay-at-home orders, online sales of beauty items exploded, with Sephora’s US online sales up 30% in May 2020 compared to May 2019, according to McKinsey data.
The $75.06 billion haircare market in 2020 is anticipated to grow at a compound annual growth rate of 5.6% to $112.97 billion by 2028, according to a haircare market study published by Fortune Business Insights. The anticipated growth in the industry is supported by the growing demand for male hair loss products, as well as the predominance of several hair-related ailments.
L’oreal (OTCMKTS:LRLCY), Coty Inc. (NYSE:COTY), and Ulta Beauty, Inc. (NASDAQ:ULTA), The Procter & Gamble Company (NYSE:PG), and The Estée Lauder Companies Inc. (NYSE:EL) are five of the market’s largest haircare players that have gained popularity not only due to the strong demand for their products but also due to their strong financial growth. In the first quarter of 2021, L’oreal’s (OTCMKTS:LRLCY) revenue came in at $9.02 billion, up 10.2% from the same period in 2020. On August 4th, Deutsche Bank analyst Thomas Sykes raised the price target of L’oreal (OTCMKTS:LRLCY) to $486 from $480 per share and kept his Buy rating. Shares of L’oreal (OTCMKTS:LRLCY) jumped 41% over the last twelve months.
Meanwhile, due to the strong demand for hair care products in China, consumer packaged goods giant The Procter & Gamble Business (NYSE:PG) has achieved consistent sales increases in its beauty division, with the company reporting 7% organic revenue growth in Q3 2021. Shares of The Procter & Gamble Business (NYSE:PG) jumped 4% in the previous month.
Investors are also keeping an eye on Tresemme manufacturer Ulta Beauty, Inc. (NASDAQ:ULTA), as the haircare company’s online sales jumped 200% in the midst of the pandemic. Shares of Ulta Beauty, Inc. (NASDAQ:ULTA) jumped 71% over the last twelve months. On July 14th, Raymond James analyst Olivia Tong upgraded Ulta Beauty, Inc. (NASDAQ:ULTA) to an Outperform rating with a $395 per share price target. The analyst commented that the beauty category is set to recover post-COVID 19 with users replenishing their collection.
The hair care industry wasn’t alone in feeling the pandemic shock. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
The stocks on our list were picked based on their fundamentals and prospects for growth based on key business characteristics. We also took into account analysts’ ratings and hedge fund sentiment while choosing these stocks. These haircare stocks have been ranked in order of the number of hedge fund holders, from the lowest to the highest.
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Best Hair Care Stocks to Buy Now
10. L’oreal (OTCMKTS:LRLCY)
Number of Hedge Fund Holders: 2
We start our list of the best hair care stocks to buy now with L’oreal (OTCMKTS:LRLCY). The France-based personal care company distributes beauty products ranging from hair color, shampoos, conditioners, and treatments. L’oreal (OTCMKTS:LRLCY) distributes to over 130 countries.
Earlier this year, L’oreal (OTCMKTS:LRLCY) announced its definitive agreement to acquire the J-beauty company Takami Co. The acquisition will support the expansion of LRLCY to the Asia Pacific region.
On August 4th, Deutsche Bank analyst Thomas Sykes raised the price target of L’oreal (OTCMKTS:LRLCY) to $486 from $480 per share and kept his Buy rating. On the same day, JPMorgan analyst Celine Pannuti raised the price target of the stock to $486 to $463 per share and kept his Overweight rating on the shares.
The company has a market cap of $258 billion. In the first quarter of 2021, L’oreal’s (OTCMKTS:LRLCY) revenue came in at $9.02 billion, up 10.2% from the same period in 2020. The strongest performing sector was the company’s active cosmetics, where sales were up 28.7% compared to the same period of 2020. Shares of L’oreal (OTCMKTS:LRLCY) jumped 41% over the last twelve months.
By the end of the first quarter of 2021, 2 hedge funds out of the 866 tracked by Insider Monkey held stakes in L’oreal (OTCMKTS:LRLCY), worth roughly $1.12 billion.
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and Coty Inc. (NYSE:COTY), L’oreal (OTCMKTS:LRLCY) is one of the best hair care stocks to buy now.
9. Natura & Co Holding S.A. (NYSE:NTCO)
Number of Hedge Fund Holders: 4
Natura & Co Holding S.A. (NYSE:NTCO) ranks 9th on the list of 10 best hair care stocks to buy now. The Brazil-based cosmetics company has operations in over 73 countries worldwide. Natura & Co Holding S.A. (NYSE:NTCO) offers personal care services through its brands The Body Shop and Aesop.
In 2020, Natura & Co Holding S.A. (NYSE:NTCO) acquired multinational cosmetics company Avon. The purchase placed NTCO as the fourth-largest beauty company with over 200 million consumers worldwide. Shares of Natura & Co Holding S.A. (NYSE:NTCO) jumped 18% over the last twelve months.
HSBC analyst Felipe Cassimiro initiated coverage on Natura & Co Holding S.A. (NYSE:NTCO) with a Buy rating, and a price target of $72 per share on July 7th, stating that global growth should be fueled by NTCO’s marketing and innovation.
The company has a market cap of $2.48 billion. In the second quarter of 2021, the company’s net loss in the first quarter came in at $29.86 million, a significant improvement from the net loss of $157.92 in the same period of 2020.
By the end of the first quarter of 2021, 4 hedge funds out of the 866 tracked by Insider Monkey held stakes in Natura & Co Holding S.A. (NYSE:NTCO), worth roughly $61 million
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), Coty Inc. (NYSE:COTY), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and L’oreal (OTCMKTS:LRLCY), Natura & Co Holding S.A. (NYSE:NTCO) is one of the best hair care stocks to buy now.
8. Regis Corporation (NYSE:RGS)
Number of Hedge Fund Holders: 10
Regis Corporation (NYSE:RGS) ranks 8th on the list of 10 best hair care stocks to buy now. The Minnesota-based American hair care company operates over 7,000 salons worldwide. Regis Corporation (NYSE:RGS) offers hair care services through its brands Supercuts, SmartStyle, MasterCuts, among others.
In January 2021, Regis Corporation (NYSE:RGS) re-purchased over 200 of its mall-based hair salons from The Beautiful Group, while the remaining 300 salons under the management of TBG are expected to shut down.
Loop Capital analyst Laura Champine upgraded Regis Corporation (NYSE:RGS) to a Buy rating, and raised the price target to $12 from $5 per share on February 1st, stating that RGS’s conversion to a franchise model will support the company’s margin and returns on its capital investment.
The company has a market cap of $271.64 million. In the second quarter of 2021, Regis Corporation (NYSE:RGS) reported an EPS of $0.72, beating consensus estimates of $0.16.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Regis Corporation (NYSE:RGS), worth roughly $173 million.
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), Coty Inc. (NYSE:COTY), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and L’oreal (OTCMKTS:LRLCY), Regis Corporation (NYSE:RGS) is one of the best hair care stocks to buy now.
7. Nu Skin Enterprises, Inc. (NYSE:NUS)
Number of Hedge Fund Holders: 19
Nu Skin Enterprises, Inc. (NYSE:NUS) ranks 7th on the list of 10 best hair care stocks to buy now. The Utah-based personal care and dietary supplement manufacturer was founded in 1984. Nu Skin Enterprises, Inc. (NYSE:NUS) offers hair care products for preventing and correcting hair through its products ageLOC and Epoch.
In January 2021, Nu Skin Enterprises, Inc. (NYSE:NUS) acquired ingredient maker 3i Solutions. Nu Skin Enterprises, Inc. (NYSE:NUS) will incorporate 3i ingredients in its new products to advance its formulation. Shares of Nu Skin Enterprises, Inc. (NYSE:NUS) increased 4% in the last three months.
In May, Deutsche Bank analyst Faiza Alwy raised Nu Skin Enterprises, Inc.’s (NYSE:NUS) price target to $64, up from $57 per share.
The company has a market cap of $2.72 billion and offers a dividend yield of 2.80%. In the first quarter of 2021, Nu Skin Enterprises, Inc. (NYSE:NUS) reported an EPS of $0.91, beating estimates by $0.19. The company’s first-quarter revenue came in at $677 million, up from $635 million in the same period of 2020.
By the end of the first quarter of 2021, 19 hedge funds out of the 866 tracked by Insider Monkey held stakes in Nu Skin Enterprises, Inc. (NYSE:NUS), worth roughly $327 million.
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), Coty Inc. (NYSE:COTY), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and L’oreal (OTCMKTS:LRLCY), Nu Skin Enterprises, Inc. (NYSE:NUS) is one of the best hair care stocks to buy now.
6. Sally Beauty Holdings, Inc. (NYSE:SBH)
Number of Hedge Fund Holders: 19
Sally Beauty Holdings, Inc. (NYSE:SBH) ranks 6th on the list of 10 best hair care stocks to buy now. The Texas-based beauty supplies retailer distributes beauty products to over 3,700 stores in 12 countries. Sally Beauty Holdings, Inc. (NYSE:SBH) was founded in 1964 and markets hair glossary, toning shampoo, conditioner, heat-protecting spray, and pomade.
In 2020, Sally Beauty Holdings, Inc. (NYSE:SBH) purchased Canadian beauty products distributor LA Maison Ami-Co Inc. The acquisition will allow Sally Beauty Holdings, Inc. (NYSE:SBH) to expand its hair color and hair care brands throughout Quebec. Shares of Sally Beauty Holdings, Inc. (NYSE:SBH) rose 57% in the last twelve months.
Sally Beauty Holdings, Inc. (NYSE:SBH) was upgraded to Market Perform by analysts at Raymond James on July 14th. Analyst Olivia Tong sees potential in the company with its omnichannel presence.
Sally Beauty Holdings, Inc. (NYSE:SBH) has a market cap of $2.16 billion. In the fiscal third quarter of 2021, Sally Beauty Holdings, Inc. (NYSE:SBH) reported an adjusted EPS of $0.68, beating estimates of $0.62. At the end of the fiscal third quarter, the revenue of Sally Beauty Holdings, Inc. (NYSE:SBH) came in at $1.02 billion, beating consensus estimates of $979.19 million.
At the end of Q1 2021, 19 hedge funds tracked by Insider Monkey have stakes in Sally Beauty Holdings, Inc. (NYSE:SBH), worth $127 million.
5. Coty Inc. (NYSE:COTY)
Number of Hedge Fund Holders: 25
Coty Inc. (NYSE:COTY) ranks 5th on the 10 best hair care stocks to buy now. The multinational beauty company headquartered in New York distributes skin care, nail care, and hair care through its 77 brands.
In May 2020, Coty Inc. (NYSE:COTY) sold a 60% stake of some of its brands including haircare brands Wella and Clairol to KKR & Co. Inc. (NYSE:KKR) for $4.3 billion. The deal covers the businesses to operate as distinct standalone companies. Shares of Coty Inc. (NYSE:COTY) rose 122$ in the last twelve months.
Raymond James analyst Olivia Tong initiated coverage on Coty Inc. (NYSE:COTY) with a Market Perform rating and no price target, stating that most of the potential near-term recovery has already been discounted into the stock.
The company has a market cap of $6.53 billion. The company’s adjusted EPS in the second quarter of 2021 came in at $017, beating consensus estimates of $0.07. Coty Inc.’s (NYSE:COTY) revenue in the second quarter of 2021 came at $1.42 billion, beating consensus estimates by $10 million.
As of Q1 2021, 25 hedge funds tracked by Insider Monkey have positions in Coty Inc. (NYSE:COTY) worth $262 million.
4. Helen of Troy Limited (NASDAQ:HELE)
Number of Hedge Fund Holders: 29
Helen of Troy Limited (NASDAQ:HELE) ranks 4th on the 10 best hair care stocks to buy now. The consumer and beauty product provider based in Texas distributes consumer products through its leading brands, including its hair care segment Bed Head and Hot Tools Professional.
In 2020, Helen of Troy Limited (NASDAQ:HELE) purchased premium hair care product provider Drybar Products LLC in a $255 in cash million deal. Shares of Helen of Troy Limited (NASDAQ:HELE) rose 14% in the last twelve months.
On January 8th, DA Davidson analyst Linda Bolton Weiser raised Helen of Troy Limited’s (NASDAQ:HELE) price target to $260 from $246 and kept its Buy rating on the stock.
The company has a market cap of $5.51 billion. In the first quarter of 2021, Helen of Troy Limited (NASDAQ:HELE) reported an adjusted EPS of $3.48, beating estimates of $2.62. In the first quarter, the company’s GAAP operating income came in at $57.0 million, an increase from $47.2 million in the same period of 2020.
At the end of the first quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $214 million in Helen of Troy Limited (NASDAQ:HELE).
3. Ulta Beauty, Inc. (NASDAQ:ULTA)
Number of Hedge Fund Holders: 46
Ulta Beauty, Inc. (NASDAQ:ULTA) ranks 3rd on the 10 best hair care stocks to buy. The Illinois-based American beauty company operates over 1,100 beauty stores in over 50 states. The company was founded in 1990 and offers hair care products through notable brands Tresemme, Redken, and Kenra Professional.
To grow Ulta Beauty, Inc.’s (NASDAQ:ULTA) e-commerce, the company purchased online booking tool Spruce and AI startups QM Scientific and GlamSt to fulfill its two-day delivery orders. During the height of the pandemic in 2020, ULTA’s e-commerce sales jumped by 200%. Shares of Ulta Beauty, Inc. (NASDAQ:ULTA) jumped 71% over the last twelve months.
On July 14th, Raymond James analyst Olivia Tong upgraded Ulta Beauty, Inc. (NASDAQ:ULTA) to an Outperform rating with a $395 per share price target. The analyst commented that the beauty category is set to recover post-COVID 19 with users replenishing their collection.
The company has a market cap of $18.98 billion. In the first quarter of 2021, Ulta Beauty, Inc. (NASDAQ:ULTA) reported an EPS of $4.10, beating estimates of $1.93. The company’s revenue in the first quarter was $1.94 billion, beating consensus estimates of $1.64 billion. Ulta Beauty, Inc. (NASDAQ:ULTA) has gained 20% year to date.
There were 46 hedge funds that reported owning stakes in Ulta Beauty, Inc. (NASDAQ:ULTA) at the end of the first quarter. The total value of these stakes at the end of Q1 is $1.43 billion.
2. The Estée Lauder Companies Inc. (NYSE:EL)
Number of Hedge Fund Holders: 59
The Estée Lauder Companies Inc.(NYSE:EL) ranks 2nd on the list of 10 best hair care stocks to buy now. The New York-based personal care company manufactures and markets skin care, makeup, and hair care to over 150 countries. Estee Lauder Companies, Inc. (NYSE:EL) beauty brands include MAC, Clinique, and Bobbi Brown.
Earlier this year, The Estée Lauder Companies Inc. (NYSE:EL) announced that it had increased its stake in DECIEM Beauty Group to 76%, valued at approximately $1.0 billion. Shares of The Estée Lauder Companies Inc. (NYSE:EL) rose 11% in the last three months.
On July 22nd, Oppenheimer analyst Rupesh Parikh raised the price target of The Estée Lauder Companies Inc. (NYSE:EL) to $355 per share from $330 per share. According to the analyst, a partnership of EL and Target could drive at least 1,000 net stores in total.
The company has a market cap of $118.7 billion and offers a dividend yield of 0.64%. The company’s fiscal third-quarter EPS was $1.62 beating consensus estimates by $0.30. The Estée Lauder Companies Inc. (NYSE:EL) revenue in the fiscal third quarter of 2021 was $3.86 billion, a 16% growth year-over-year.
By the end of the first quarter of 2021, 59 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Estée Lauder Companies Inc. (NYSE:EL), worth roughly $4.10 billion.
Cooper Investors mentioned Estee Lauder Companies, Inc. (NYSE:EL) in its Q4 2020 investor letter:
“Estee Lauder was sold because the business is experiencing a very significant share price appreciation in a short period. We bought this great company earlier in 2020, however Value Latencies appear exhausted – to highlight this point Estee Lauder now trades on 45x Free Cash Flow.”
1. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 70
Topping the list of 10 best hair care stocks to buy now is The Procter & Gamble Company (NYSE:PG). The Ohio-based consumer goods corporation operates in over 80 countries with sales in more than 160 countries. The Procter & Gamble Company (NYSE:PG) also offers hair care products through its brands Pantene, Old Spice, and Aussie.
In June, UBS analyst Peter Grom initiated coverage on The Procter & Gamble Company (NYSE:PG) with a Neutral rating and a $138 price target.
The company has a market cap of $352.42 billion and currently offers a dividend yield of 2.42%. In the fiscal third quarter of 2021, The Procter & Gamble Company (NYSE:PG) reported an EPS of $1.26, beating estimates by $0.07. The company’s fiscal third-quarter revenue was $18.11 billion, up 5.2% year-over-year and beating consensus estimates of $17.9 billion. The beauty division growth was mainly due to a 30% increase in SK-II brand sales and organic sales in hair care led by innovations in China.
At the end of the first quarter of 2021, 70 hedge funds in the database of Insider Monkey held stakes worth $8.53 billion in The Procter & Gamble Company (NYSE:PG).
You can also take a peek at 10 Best Consumer Finance Stocks To Buy Now and 10 Best Communication Equipment Stocks To Buy.
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Disclose. None. 10 Best Hair Care Stocks to Buy Now is originally published on Insider Monkey.
