5 Best Hair Care Stocks To Buy Now

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

Number Of Hedge Fund Holders: 52

Ulta Beauty, Inc. (NASDAQ:ULTA), formerly known as Ulta Salon, is an American chain of beauty stores that provides both mass and prestige cosmetics, fragrances, skin care and hair care products, in addition to offering salon services.

On August 29, Barclays analyst Adrienne Yih raised the price target on Ulta Beauty, Inc. (NASDAQ:ULTA) to $511 from $491 and kept an Overweight rating on the shares of the company. Ulta Beauty, Inc. (NASDAQ:ULTA) reported Q2 results that surpassed across the board on sales, gross margin, operating expenses, and earnings. According to the analyst, the company further improved its resilience in the beauty category.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Ulta Beauty, Inc. (NASDAQ:ULTA), with 701,400 shares worth more than $270 million.

In its Q2 2022 investor letter,  ClearBridge Investments, an asset management firm, highlighted a few stocks and Ulta Beauty, Inc. (NASDAQ:ULTA) was one of them. Here is what the fund said:

“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 omni-channel cosmetics retailer Ulta Beauty, Inc. (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.”