Is Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) an outstanding investment now? The smart money is taking an optimistic view. The number of bullish hedge fund positions rose by 5 in recent months.ULTA was in 32 hedge funds’ portfolio at the end of September. There were 27 hedge funds in our database with ULTA positions at the end of the previous quarter.
In the financial world, there are tons of indicators market participants can use to monitor Mr. Market. Some of the most innovative are hedge fund and insider trading movement. Insider Monkey’s research has shown that, historically, those who follow the top picks of the best money managers can beat the market by a superb amount (see just how much).
Just as beneficial, bullish insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are a number of motivations for an executive to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if shareholders know where to look (learn more here).
With these “truths” under our belt, it’s important to take a glance at the key action encompassing Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA).
What does the smart money think about Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)?
At the end of the second quarter, a total of 32 of the hedge funds we track were long in this stock, a change of 19% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Lone Pine Capital, managed by Stephen Mandel, holds the biggest position in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Lone Pine Capital has a $566 million position in the stock, comprising 2.5% of its 13F portfolio. Coming in second is Blue Ridge Capital, managed by John Griffin, which held a $238.9 million position; the fund has 2.9% of its 13F portfolio invested in the stock. Other peers with similar optimism include Bain Capital’s Brookside Capital, Alexander Mitchell’s Scopus Asset Management and Patrick McCormack’s Tiger Consumer Management.
As one would reasonably expect, key money managers have jumped into Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) headfirst. Renaissance Technologies, founded by Jim Simons, established the most outsized position in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Renaissance Technologies had 28.2 million invested in the company at the end of the quarter. Julian Robertson’s Tiger Management also initiated a $20.1 million position during the quarter. The other funds with new positions in the stock are Alexander Mitchell’s Scopus Asset Management, Alok Agrawal’s Bloom Tree Partners, and Dmitry Balyasny’s Balyasny Asset Management.
What have insiders been doing with Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time frame, Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). These stocks are VCA Antech Inc (NASDAQ:WOOF), Bright Horizons Family Solutions Inc (NYSE:BFAM), Weight Watchers International, Inc. (NYSE:WTW), H&R Block, Inc. (NYSE:HRB), and Service Corporation International (NYSE:SCI). This group of stocks belong to the personal services industry and their market caps are closest to ULTA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|VCA Antech Inc (NASDAQ:WOOF)||29||0||5|
|Bright Horizons Family Solutions Inc (NYSE:BFAM)||11||0||11|
|Weight Watchers International, Inc. (NYSE:WTW)||18||0||0|
|H&R Block, Inc. (NYSE:HRB)||43||0||1|
|Service Corporation International (NYSE:SCI)||29||0||0|
Overall, ULTA seems to garner an above average interest from hedge funds. This is a bullish indicator, at least in the short-term.