5 Best Small Cap Stocks To Buy for 2022

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1. The Beauty Health Company (NASDAQ:SKIN)

Number of Hedge Fund Holders: 39

The Beauty Health Company (NASDAQ:SKIN) is a California-based provider of skincare products around the globe, with its propriety products being the HydraFacial and PERK hydra-dermabrasion systems.

On January 7, William Blair analyst Margaret Kaczor initiated coverage of The Beauty Health Company (NASDAQ:SKIN) with an ‘Outperform’ rating and no price target. The analyst sees the company outperforming the broader market, whilst focusing on the “under-penetrated” beauty health market, with its main asset, HydraFacial, only 12% penetrated in the US market. Kaczor expects the company to generate 20%+ growth in the next three to five years, as one of the few pure plays at the intersection of the consumer health and the fast-growing retail beauty segment. Over the next five years, the global demand for skincare products is expected to grow significantly, and The Beauty Health Company (NASDAQ:SKIN) is well-positioned to enjoy this boom.

Out of all the hedge funds tracked by Insider Monkey, 39 were long The Beauty Health Company (NASDAQ:SKIN) at the close of the third quarter, holding stakes of $865.4 million. This shows a positive trend from last quarter, where 33 hedge funds held stakes worth $665.23 million in the company.

Baron Funds, an investment management firm, talked about many stocks in its Q3 2021 investor letter, and The Beauty Health Company (NASDAQ:SKIN) was one of them. Here’s what the fund said:

The Beauty Health Company is an innovative skin care and aesthetics company providing consumers the benefits of a professional medical treatment with the experience of a consumer brand. Shares outperformed in the third quarter following better-than-expected earnings results and the announcement of two new retail partnerships with Nordstrom and Ulta, where the company expects to sell an aesthetics device that customers can use in their home. We continue to be attracted to the company’s assetlight, recurring revenue business model and see the company doubling its revenues organically over the next few years. We also believe that Beauty Health will boost shareholder value over time through accretive acquisitions.”

You can also take a peek at Billionaire Steve Cohen’s Top 10 Stock Picks and Cathie Wood’s Thoughts on the Future, ARK’s Portfolio and Latest Stock Picks.

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