I sometimes refer to ULTA as "Vanity of Women, Inc.," and I (half) joke that one should not bet against that. I've traded it off and on, and have been lucky enough to buy lower and sell higher. (What happens is that I buy at what I think is a reasonable price, and then it jumps to something I think is not too reasonable in a short time, so I sell.) I sold out before the recent general downturn that started early last month, but I also happened to notice that it's risen even more since then. (If I had kept it, it would have gone down, of course, and people who kept holding should send me thank-you checks for my divestment.)It's been on a roll since the end of August, when they announced a partnership with Kylie Jenner, even though I don't think any details have been revealed.Even without that news, I think they tend to fit the criteria for growth stocks we tend to have here, despite being a retail chain. A better fit than ROST, TJX, M, TGT, AEO, FIVE, KSS, JWN? I think so. OLLI? Not sure.Maybe NVDA can stop being the recent Rodney Dangerfield of great growth stocks by parlaying its video cards into some kind of "virtual mirror partnership" with ULTA, too? Especially if it's Kylie in the mirror...
ULTA, "Vanity of Women, Inc.," has been on my fast growth list for a long time it has a 10 year CAGR of 40% and yesterday it made a new all time high. I never bought it... :(Even without that news, I think they tend to fit the criteria for growth stocks we tend to have here, despite being a retail chain. A better fit than ROST, TJX, M, TGT, AEO, FIVE, KSS, JWN? I think so. OLLI? Not sure. Of the stocks listed I've invested in ROST "Dress for Less, Ross Stores" which has outperformed ULTA http://softwaretimes.com/pics/ulta-11-14-2018.gifThey share in common their market, the lower middle class, which is also their strength. Since their customers are in the millons they have pricing power which business with concentrated 10% customers seldom have. They service borderline must-have, discretionary markets less affected by economic downturns than luxury items and services. People will postpone the next Lear Jet but not the next haircut. These lower middle class providers, which include Costco, seem to be the least affected retailers during downturns. But notice that Costco services a higher economic class and underperforms ROST and ULTA. ROST customers can't afford to buy in bulk.Denny Schlesinger
Actually I sold ULTA as well in the 280s. I could not see how the slowing growth rate and target store count could justify higher multiples. It is up 10% in the last week. I think this is the reasonhttps://seekingalpha.com/news/3407572-ulta-beauty-updates-gu...Unlike TJX, ROST I don't see ULTA as recession proof. It has a wide range of beauty products but the hair cuts are like 2x what it is in malls.
I think that NVDA will surpass ULTA as an investment over the next 5 years. Many more secular growth opportunities, no need to open more and more stores, and no chance of being out of fashion for anyone's vanity.
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