Author Topic: ULTA - Ulta Beauty  (Read 6032 times)

BG2008

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Re: ULTA - Ulta Beauty
« Reply #30 on: September 04, 2019, 02:12:54 PM »
This is such a man's way of thinking...men seeks efficiency and lowest price...women seeks adventure and discovery and all over again

That is such a man's way of thinking..

You got me good


wescobrk

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Re: ULTA - Ulta Beauty
« Reply #31 on: September 04, 2019, 07:39:27 PM »
down to $227 a share in after hours...

KCLarkin

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Re: ULTA - Ulta Beauty
« Reply #32 on: September 11, 2019, 10:36:45 AM »
Own the brands, L'Oreal, EL, LVMH etc. EM and travel is where the growth is at, not the US.

Thanks for this. I am warming up to the brands, but not willing to pay current prices. I recently watched a Fundsmith video where they named L'Oreal as the one stock in the universe they would own forever. Not sure I agree, but they made a compelling argument.

I'm currently reading a phenomenal interview with Bill Stewart in Graham & Dodsville:
https://www8.gsb.columbia.edu/valueinvesting/sites/valueinvesting/files/Graham%20&%20Doddsville_Issue%2036_vF.pdf

One of the things that struck me from the interview is how many phenomenal growth stocks over the years have been retailers: Home Depot, CVS, Walmart, Costco, TJX, Dollar General, Tractor Supply, Lululemon, Alimentation Couche-Tard, Ulta come immediately to mind. Over most time periods, several of the best performing stocks are retailers. For example, Kiplingers has a list of the top performing S&P 500 stocks over a 50 year period. Four of the top fifteen are retailers:

4. Dollar General
7. Lowe's
13. Walgreen's
15. TJX

Notably, there aren't many company's from the "growth" sectors like technology and healthcare. ADP at number 10 was the closest to a "technology" company in the top 15. And only two healthcare companies (Abbott and Medtronic) made the top 15.

There is something about retail (insert past performance caveat here) that allows for long periods of sustainable growth even though retailing is very competitive and the moats are squishy at best. Part of it is the simple growth formula of SSS + store openings. Operating leverage probably plays a role too.

Obviously, retail is a terrible business. But there are a few select companies that can unlock a sustainable growth formula. I think Ulta is one of them and I think the current pessimism will create a tremendous buying opportunity. I currently have a 2.5% starter position but hoping for further weakness.

Management seems top-notch, the strategy is sound, substantial white-space remains. And, as evidenced by some of the comments on this thread, the company is deeply misunderstood.