In this article, we discuss the 5 best hair care stocks to buy now. If you want to read our detailed analysis of the industry and its future outlook, go directly to 10 Best Hair Care Stocks To Buy Now.
5. Newell Brands Inc. (NYSE:NWL)
Number Of Hedge Fund Holders: 22
Newell Brands Inc. (NYSE:NWL) is an American manufacturer, marketer and distributor of consumer and commercial products which include Home Appliances, Home Solutions, Learning and Development, Outdoor and Recreation and Commercial Solutions products. The company has a strong portfolio of well-known brands, including Rubbermaid, FoodSaver, Calphalon, and Sistema.
Earlier this June, Deutsche Bank analyst Steve Powers lowered the price target on Newell Brands Inc. (NYSE:NWL) to $22 from $25 and kept a Hold rating on the shares following Deutsche’s consumer conference in Paris. According to the company’s Q2 earnings report posted on June 29, Newell Brands Inc. (NYSE:NWL) recorded an EPS of $0.57, crossing market estimates by $0.10. Additionally, the company raked in revenues amounting to $2.53 billion.
By the end of the second quarter of 2022, 22 hedge funds were long Newell Brands Inc. (NYSE:NWL). This is compared to 31 hedge funds in the first quarter of 2022 with stakes of $1.64 billion. Richard S. Pzena’s Pzena Investment Management is the company’s leading shareholder, with 37.57 million shares worth approximately $715.3 million.
4. Coty Inc. (NYSE:COTY)
Number Of Hedge Fund Holders: 29
Coty Inc. (NYSE:COTY) is a French-American multinational beauty company that develops, manufactures, markets, and distributes professional and retail hair care products, alongside a number of fragrances, cosmetics, and skin care products.
On June 30, Piper Sandler analyst Korinne Wolfmeyer initiated coverage of Coty Inc. (NYSE:COTY) with a Neutral rating and $8 price target. According to the analyst, the company’s “heavy exposure” to prestige fragrance, which represents over 50% of sales, could create tough upcoming comps, and its less-than-favorable exposure to prominent areas like China and travel retail versus peers could share limit upside from “recovery tailwinds.”
Among the hedge funds being tracked by Insider Monkey, New York-based firm Melvin Capital Management is a leading shareholder in Coty Inc. (NYSE:COTY), with 29 million shares worth more than $264 million. Overall, 29 hedge funds reported holding stakes in Coty Inc. (NYSE:COTY) as of Q2 2022.
In its Q3 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Coty Inc. (NYSE:COTY) was one of them. Here is what the fund said:
“Coty Inc. (NYSE:COTY) is a global beauty company primarily made up of its market leading prestige fragrance business and a mass cosmetic business acquired from P&G that includes brands such as Covergirl. It is a turnaround story catalyzed by the new CEO, Sue Nabi, an experienced beauty expert who previously worked at L’Oreal and successfully executed turnarounds and the relaunch of its Lancome and L’Oreal Paris brands. Early signs are supportive of improving performance in Coty’s cosmetics business. Coty Inc. (NYSE:COTY) should also benefit from an accelerating growth trend in its prestige fragrance business driven by purchases shifting online and the category’s emerging popularity.”
3. The Estée Lauder Companies Inc. (NYSE:EL)
Number Of Hedge Fund Holders: 46
The Estée Lauder Companies Inc. (NYSE:EL) is an American multinational cosmetics company that operates as a manufacturer and marketer of makeup, skincare, fragrance and hair care products. The company’s products are sold in approximately 150 countries and territories under brand names including Estée Lauder, Aramis, and Clinique, among others.
DA Davidson analyst Linda Weiser lowered her price target on The Estée Lauder Companies Inc. (NYSE:EL) to $318 from $342 but kept a Buy rating on the shares of the company on August 23. The analyst cites the company’s below-consensus FY23 earnings guidance, though the management still expects robust top-line growth to resume in the second half of the year. Although she cut her 2023 EPS view, Weiser states that she is open to being surprised by the company’s upside as China’s economy once again reopens.
Based on Insider Monkey’s database, 46 elite funds held stakes in The Estée Lauder Companies Inc. (NYSE:EL) in the second quarter of 2022. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in The Estée Lauder Companies Inc. (NYSE:EL), with 5.95 million shares worth more than $1.51 billion.
2. Ulta Beauty, Inc. (NASDAQ:ULTA)
Number Of Hedge Fund Holders: 52
Ulta Beauty, Inc. (NASDAQ:ULTA), formerly known as Ulta Salon, is an American chain of beauty stores that provides both mass and prestige cosmetics, fragrances, skin care and hair care products, in addition to offering salon services.
On August 29, Barclays analyst Adrienne Yih raised the price target on Ulta Beauty, Inc. (NASDAQ:ULTA) to $511 from $491 and kept an Overweight rating on the shares of the company. Ulta Beauty, Inc. (NASDAQ:ULTA) reported Q2 results that surpassed across the board on sales, gross margin, operating expenses, and earnings. According to the analyst, the company further improved its resilience in the beauty category.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Ulta Beauty, Inc. (NASDAQ:ULTA), with 701,400 shares worth more than $270 million.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Ulta Beauty, Inc. (NASDAQ:ULTA) was one of them. Here is what the fund said:
“After seeding the portfolio with select growth companies in the second half of 2020 and 2021, we have redirected our focus over the last several quarters to risk management. Moves during the second quarter in pursuit of greater stability included reducing consumer discretionary exposure with the sale of omni-channel cosmetics retailer Ulta Beauty, Inc. (NASDAQ:ULTA).
We exited Ulta as our thesis has largely played out in terms of a post-COVID 19 earnings recovery. Ulta has steadily gained share over the last several years and its partnership with Target (TGT) represents a new avenue to gain customer loyalty. That being said, we are wary about the resilience of the consumer and the impact of labor cost inflation, which could crimp Ulta’s margin expansion in coming quarters. As with recent activity, the sale further reduces our consumer discretionary exposure and helps manage portfolio risk through an ongoing period of volatility.”
1. The Procter & Gamble Company (NYSE:PG)
Number Of Hedge Fund Holders: 71
The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods corporation that provides a wide range of branded consumer products, including personal care and hygiene products. The company holds one of the strongest dividend histories, offering dividends to shareholders for the past 132 years.
On August 1, Truist analyst Bill Chappell lowered the price target on The Procter & Gamble Company (NYSE:PG) to $160 from $175 but maintained a Buy rating on the shares. Although the Q4 earnings miss has made the analyst somewhat cautious of the consumer environment, he remains adamant that the company’s premium-priced portfolio will win out in the end.
Ray Dalio’s Bridgewater Associates owned stakes worth over $970 million in The Procter & Gamble Company (NYSE:PG), becoming its largest stakeholder in Q2. Overall, 71 hedge funds tracked by Insider Monkey presented a bullish stance on the company in Q2, with stakes valued at over $5.5 billion.
You can also take a look at 10 Small-Cap Stocks that Pay Dividends and Warren Buffett’s 10 Favorite Dividend Stocks for the Rest of 2022.
