5 Best Buy-The-Dip Consumer Stocks to Consider

2. RH (NYSE:RH)

Number of Hedge Fund Holders: 63

YTD Share Price Decline as of July 1: 59%

RH (NYSE:RH) operates as a California-based home furnishings retailer. As of July 1, the stock has declined 59% year to date. Citi analyst Steven Zaccone pointed towards key investor concerns after RH (NYSE:RH)’s second guidance cut in a month. The analyst cited short-term concerns, but believes “a lot of damage is already priced in”. The stock now trades at nine-times his slashed fiscal 2023 earnings estimates, which he views “as the most extreme bear case”. According to the analyst, RH (NYSE:RH)’s risk/reward “skews to significantly more upside than downside at current valuation” and he kept a Buy rating on the stock with a $338 price target on July 1. 

Among the hedge funds tracked by Insider Monkey, 63 funds disclosed long positions in RH (NYSE:RH) at the end of Q1 2022, up from 58 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 2.17 million shares worth $707.6 million. 

Here is what Polen US SMID Company Growth Fund has to say about RH (NYSE:RH) in its Q1 2022 investor letter:

“RH is a furniture store company with brand recognition and a unique business model. The company’s stock price fell sharply over the first three months of 2022 despite solid operating results, which resulted in what we believed to be an attractive opportunity to add to our position in the company. We are mindful that, on the margin, the company is certainly experiencing some early impact from record inflation and rising interest rates, and we feel comfortable in both the management team’s ability to navigate these challenges and the power of the company’s brand and its long-term potential.”