Do Hedge Funds Love Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA)?

Due to the fact that Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there was a specific group of hedgies that decided to sell off their full holdings heading into Q4. Intriguingly, Gabriel Plotkin’s Melvin Capital Management sold off the biggest position of the “upper crust” of funds monitored by Insider Monkey, comprising close to $46.3 million in stock. Charles Anderson’s fund, Fox Point Capital Management, also said goodbye to its stock, about $7.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds heading into Q4.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) but similarly valued. We will take a look at Marathon Oil Corporation (NYSE:MRO), Xerox Corporation (NYSE:XRX), Textron Inc. (NYSE:TXT), and MGM Resorts International (NYSE:MGM). All of these stocks’ market caps are closest to ULTA’s market cap.

As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $895 million. That figure was $1878 million in ULTA’s case. MGM Resorts International (NYSE:MGM) is the most popular stock in this table. On the other hand Textron Inc. (NYSE:TXT) is the least popular one with only 26 bullish hedge fund positions. Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal, and we’d rather spend our time researching stocks that hedge funds are collectively most fond of. In this regard, MGM might be a better alternative.