Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)’s stock has opened nearly 10% higher on the back of the company posting its financial results for the third quarter of its fiscal 2015. For the quarter ended October 31, Ulta reported an annual net sales growth of 22% to $910.70 million, while its profit advanced to $1.11 per share from $0.91 a year earlier. Moreover, the results exceeded the analysts’ estimates of $1.05 in EPS and $880 million in revenue.
In addition to that, the beauty retailer delivered a 12.8% comparable sales growth, compared to a 9.5% increase a year earlier. For the current quarter, the company forecasts EPS in the range of $1.48 to $1.53 and revenue between $1.21 billion and $1.23 billion, which compare to the Street’s expectations of $1.50 and $1.22 billion, respectively. For the full fiscal 2015, Ulta’s outlook includes EPS and sales growth in the low 20% range and 20% range, respectively.
Counting in today’s jump, Ulta’s stock has surged by almost 40% so far this year, a fact that was not left unnoticed by the smart money investors that we track at Insider Monkey, who have amassed 18% of the company. Even though, the number of funds with long positions inched down by two to 30, the total value of their holdings advanced to $1.88 billion, from $1.53 billion during the third quarter.
To most investors, hedge funds are perceived as worthless, old financial vehicles of years past. While there are more than 8000 funds with their doors open today, Our experts choose to focus on the masters of this club, around 700 funds. These hedge fund managers command the bulk of the hedge fund industry’s total capital, and by shadowing their finest investments, Insider Monkey has formulated a small-cap investment strategies that exceeded the S&P 500 index by 12 percentage points a year for a decade in out back tests.
Keeping this in mind, on the following page, we’re going to take a closer look at the latest action regarding Ulta Salon among the investors from our database.
How are hedge funds trading Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)?
According to the latest round of 13F filings, Lone Pine Capital, managed by Stephen Mandel, holds the biggest position in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), valued at $535.2 million at the end of September, and comprising 2.2% of its 13F portfolio. Coming in second is Clifford Fox’s Columbus Circle Investors, with a $255.5 million position. Other professional money managers that are bullish comprise John Griffin’s Blue Ridge Capital, Bain Capital’s Brookside Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
On the other hand, Gabriel Plotkin’s Melvin Capital Management and Charles Anderson’s Fox Point Capital Management unloaded their positions between July and September, previously holding stakes valued at $46.3 million and $7.7 million, respectively.
Moreover, let’s also examine hedge fund activity in other stocks with market caps close to to Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA)’s. These stocks are Marathon Oil Corporation (NYSE:MRO), Xerox Corporation (NYSE:XRX), Textron Inc. (NYSE:TXT), and MGM Resorts International (NYSE:MGM).
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRO | 34 | 429246 | 1 |
| XRX | 33 | 547895 | 3 |
| TXT | 26 | 688242 | -7 |
| MGM | 49 | 1914535 | -9 |
As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $895 million. Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) registers a higher aggregate value of holdings, but its popularity is below average. This could suggest that the funds from our database are not very fond of the stock, compared to its market cap peers, or maybe they are not very bullish on the whole industry. In any case ULTA might represent an interesting investment and is worth your attention.
