5 Best Beauty Stocks To Buy Now

2. Ulta Beauty, Inc. (NASDAQ:ULTA)

Number of Hedge Fund Holders: 52

Ulta Beauty, Inc. (NASDAQ:ULTA) is an Illinois-based retailer of beauty products in the United States. The company offers cosmetics, fragrances, skincare and haircare products, bath and body products, and salon styling tools. On October 21, Jefferies analyst Ashley Helgans took over coverage of Ulta Beauty, Inc. (NASDAQ:ULTA) and kept a Buy rating on the shares with an unchanged price target of $485, citing the solid demand in the beauty sector. 

Among the hedge funds tracked by Insider Monkey, 52 funds were bullish on Ulta Beauty, Inc. (NASDAQ:ULTA) at the end of the second quarter of 2022, compared to 48 funds in the prior quarter. The combined stakes held by elite funds increased to $1.7 billion in Q2 2022 from $1.1 billion in the first quarter. Jim Simons’ Renaissance Technologies is a prominent position holder in the company, with 701,400 shares valued at $270.3 million. 

Here is what ClearBridge Large Cap Growth ESG Strategy has to say about Ulta Beauty, Inc. (NASDAQ:ULTA) in its Q2 2022 investor letter:

“After seeding the portfolio with select growth companies in the second half of 2020 and 2021, we have redirected our focus over the last several quarters to risk management. Moves during the second quarter in pursuit of greater stability included reducing consumer discretionary exposure with the sale of omnichannel cosmetics retailer Ulta Beauty (NASDAQ:ULTA).

We exited Ulta as our thesis has largely played out in terms of a post-COVID 19 earnings recovery. Ulta has steadily gained share over the last several years and its partnership with Target (TGT) represents a new avenue to gain customer loyalty. That being said, we are wary about the resilience of the consumer and the impact of labor cost inflation, which could crimp Ulta’s margin expansion in coming quarters. As with recent activity, the sale further reduces our consumer discretionary exposure and helps manage portfolio risk through an ongoing period of volatility.”