5 Stocks Billionaire David Harding is Buying in Droves

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

Value of Winton Capital Management‘s 13F Position: $18.4 million

Number of Hedge Fund Shareholders: 48

Winton Capital grew its Ulta Beauty, Inc. (NASDAQ:ULTA) position nearly 7-fold during Q1 to 46,191 shares. Several other hedge funds were also buying up ULTA shares in Q1, as there was a 26% increase during the quarter in terms of the number of funds long the stock. Alexander Mitchell’s Scopus Asset Management built the largest new stake in ULTA during Q1, consisting of 142,500 shares.

Ulta Beauty, Inc. (NASDAQ:ULTA) has been on a roll for several quarters now, driven by the overall strength of the beauty sector. The company grew sales by 21% year-over-year to $2.35 billion during Q1, while earnings soared by 54% to $6.28 per share. That actually represented the company’s weakest quarterly earnings growth in the last year following three consecutive quarters of phenomenal triple-digit growth, including 454% and 519% growth in the middle quarters of 2021. Raymond James upgraded Ulta Beauty to ‘Strong Buy’ from ‘Outperform’ in late June, pointing out that 40% of the company’s customers have six-figure household incomes, which should help insulate it from a recession. The firm has a $485 price target on the stock

The ClearBridge Investments Large Cap Growth Strategy was bullish on consumer spending heading into 2022, predicting it would benefit retailers like Ulta Beauty, Inc. (NASDAQ:ULTA). The following comments are from the fund’s Q4 2021 investor letter:

“Several encouraging macro trends are emerging in support of two areas outside tech: consumer spending and industrial production. Unlike in past recessions and recoveries, consumer balance sheets have actually improved dramatically since the onset of the pandemic. This should feed through to increased spending on discretionary items offered by retailers like Ulta Beauty. We expect the supply chain constraints contributing to inflation and goods shortages will begin to lessen with an ambitious rebuilding of inventories.”