Here is What Hedge Funds Think About Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA)

Is Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) worth your attention right now? Money managers are buying. The number of bullish hedge fund positions improved by 13 recently.

In the eyes of most shareholders, hedge funds are seen as slow, old investment tools of years past. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the moguls of this group, about 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by paying attention to their best picks, we have uncovered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as beneficial, bullish insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are many reasons for an insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

Consequently, it’s important to take a glance at the latest action surrounding Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA).

What have hedge funds been doing with Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)?

At Q1’s end, a total of 41 of the hedge funds we track held long positions in this stock, a change of 46% from the previous quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably.

Of the funds we track, Lone Pine Capital, managed by Stephen Mandel, holds the most valuable position in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Lone Pine Capital has a $488.5 million position in the stock, comprising 2.5% of its 13F portfolio. On Lone Pine Capital’s heels is Hoplite Capital Management, managed by John Lykouretzos, which held a $179.8 million position; 5.8% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Bain Capital’s Brookside Capital, Patrick McCormack’s Tiger Consumer Management and Robert Pohly’s Samlyn Capital.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Tiger Consumer Management, managed by Patrick McCormack, created the biggest position in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Tiger Consumer Management had 107.8 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also initiated a $83 million position during the quarter. The other funds with new positions in the stock are Michael Karsch’s Karsch Capital Management, Tony Chedraoui’s Tyrus Capital, and Clint Carlson’s Carlson Capital.

What have insiders been doing with Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past six months. Over the last 180-day time period, Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). These stocks are VCA Antech Inc (NASDAQ:WOOF), Bright Horizons Family Solutions Inc (NYSE:BFAM), Weight Watchers International, Inc. (NYSE:WTW), H&R Block, Inc. (NYSE:HRB), and Service Corporation International (NYSE:SCI). All of these stocks are in the personal services industry and their market caps are closest to ULTA’s market cap.