12 Best Beauty Stocks to Buy According to Hedge Funds

4. Estée Lauder Companies Inc. (NYSE:EL) 

Number of Hedge Fund Holders: 49

One of the Best Beauty Stocks, Estée Lauder Companies Inc. (NYSE:EL) is the top supplier of high-end beauty products. The company has maintained its preferred vendor status on both physical and digital platforms and strengthened its competitive position with market-leading brands in skin care, cosmetics, and fragrances. Skincare accounts for 51% of the company’s Q2 2024 sales, followed by makeup (29%), fragrance (16%), and hair care (4%). The revenue of the beauty behemoth, which operates in over 150 countries, is split as follows: The Americas account for 30%, Europe, the Middle East, and Africa (including retail travel) for 39%, and Asia-Pacific for 31%.

Estée Lauder Companies Inc. (NYSE:EL)’s brands include La Mer, Bumble & Bumble, and Aveda. The company has found an expanding customer base for its high-end skincare products, but it has recently battled with a slowdown in China, forcing it to cut its dividend.

In Q1 of 2025, Clinique’s net sales rose by double digits globally, with growth across all regions. The company benefited from continued strength in the lip subcategory, led by the Clinique Pop and Almost Lipstick product franchises, and new product innovation. Additionally, Estée Lauder Companies Inc. (NYSE:EL) launched in Amazon’s U.S. Premium Beauty store in the third quarter of 2024.

Le Labo’s net sales rose by double digits, mostly due to the Classic Collection’s ongoing popularity and the yearly City Exclusive event, which also featured new product innovation. The company also profited from targeted improved consumer reach, including direct-to-consumer, worldwide.

Estée Lauder Companies Inc. (NYSE:EL) achieved a 200-point increase in market share in a single quarter, gaining market share in prestige beauty in Mainland China and becoming the top fragrance company in Japan. In the first quarter of fiscal 2025, the company’s retail sales increased by double digits, which led to gains in the share of prestige beauty over the previous year.

D. E. Shaw’s D E Shaw was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 3.43 million shares worth $341.49 million as of Q3.

Appleseed Fund stated the following regarding The Estée Lauder Companies Inc. (NYSE:EL) in its Q3 2024 investor letter:

“Appleseed Fund added four new names to the portfolio in the past six months: The Estée Lauder Companies Inc. (NYSE:EL), Willis Lease Finance (WLFC), Diana Shipping (DSX) and Gravity (GRVY). Estée Lauder is one of the world’s largest producers of cosmetics products, and valuation has become very attractive as this premier beauty company is suffering from a post-COVID-19 hangover.”