5 Best Beauty Stocks To Buy Now

2. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Holders: 61

Colgate-Palmolive Company (NYSE:CL) is a giant in the cosmetics industry, with some of the most popular soap, skincare, and toothcare brands. Colgate-Palmolive Company (NYSE:CL) stock is also highly popular among the elite hedge funds tracked by Insider Monkey. As of the end of the fourth quarter of 2022, 61 hedge funds in Insider Monkey’s database had stakes in Colgate-Palmolive Company (NYSE:CL). The total value of these stakes at the end of December 2022 was $4.5 billion. The biggest hedge fund stakeholder of Colgate-Palmolive Company (NYSE:CL) was Dan Loeb’s Third Point which had a $910 million stake in the company.

Third Point made the following comment about Colgate-Palmolive Company (NYSE:CL) in its Q4 2022 investor letter:

Colgate-Palmolive Company (NYSE:CL) remains one of the firm’s largest equity positions. The company offers defensive growth at a reasonable valuation, and we continue to see the potential for shares to deliver attractive risk adjusted returns over the next several years.

Fourth Quarter results were disappointing. The company missed on gross margins, guided 2023 well below the Street, and took another large impairment charge on its portfolio of skin care brands. The price action on the day of the print (down 5%) was extreme and perhaps reflective of growing investor frustration that the company has failed to sustainably grow earnings over the past decade.

We believe some of this “miss” was beyond the company’s control and that Colgate is on the road to delivering more predictable results. Organic growth remains strong and we expect it to start translating into earnings growth as execution improves, margins recover, and external pressures calm down…” (Click here to read the full text)