There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA).
Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) shareholders have witnessed an increase in enthusiasm from smart money of late. ULTA was in 40 hedge funds’ portfolios at the end of September. There were 36 hedge funds in our database with ULTA holdings at the end of the previous quarter. At the end of this article we will also compare ULTA to other stocks including Genuine Parts Company (NYSE:GPC), Northern Trust Corporation (NASDAQ:NTRS), and TD Ameritrade Holding Corp. (NYSE:AMTD) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, let’s go over the fresh action regarding Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA).
How have hedgies been trading Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)?
At the end of the third quarter, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Lone Pine Capital, managed by Stephen Mandel, holds the number one position in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Lone Pine Capital has a $702.2 million position in the stock, comprising 3.1% of its 13F portfolio. Sitting at the No. 2 spot is John Griffin of Blue Ridge Capital, with a $251.5 million position; 3% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish consist of Principal Global Investors’ Columbus Circle Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Robert Pohly’s Samlyn Capital.