10 Best Hair Care Stocks to Buy Now
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In this article, we will discuss the 10 best hair care stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Hair Care Stocks to Buy Now.
Last year, the hair care and beauty industries took a wavy path as the world implemented a lockdown, resulting in widespread retail and salon store closures and a decrease in global sales of numerous beauty and personal care products. With the stay-at-home orders, online sales of beauty items exploded, with Sephora's US online sales up 30% in May 2020 compared to May 2019, according to McKinsey data.
The $75.06 billion haircare market in 2020 is anticipated to grow at a compound annual growth rate of 5.6% to $112.97 billion by 2028, according to a haircare market study published by Fortune Business Insights. The anticipated growth in the industry is supported by the growing demand for male hair loss products, as well as the predominance of several hair-related ailments.
L'oreal (OTCMKTS:LRLCY), Coty Inc. (NYSE:COTY), and Ulta Beauty, Inc. (NASDAQ:ULTA), The Procter & Gamble Company (NYSE:PG), and The Estée Lauder Companies Inc. (NYSE:EL) are five of the market's largest haircare players that have gained popularity not only due to the strong demand for their products but also due to their strong financial growth. In the first quarter of 2021, L'oreal's (OTCMKTS:LRLCY) revenue came in at $9.02 billion, up 10.2% from the same period in 2020. On August 4th, Deutsche Bank analyst Thomas Sykes raised the price target of L'oreal (OTCMKTS:LRLCY) to $486 from $480 per share and kept his Buy rating. Shares of L'oreal (OTCMKTS:LRLCY) jumped 41% over the last twelve months.
Meanwhile, due to the strong demand for hair care products in China, consumer packaged goods giant The Procter & Gamble Business (NYSE:PG) has achieved consistent sales increases in its beauty division, with the company reporting 7% organic revenue growth in Q3 2021. Shares of The Procter & Gamble Business (NYSE:PG) jumped 4% in the previous month.
Investors are also keeping an eye on Tresemme manufacturer Ulta Beauty, Inc. (NASDAQ:ULTA), as the haircare company's online sales jumped 200% in the midst of the pandemic. Shares of Ulta Beauty, Inc. (NASDAQ:ULTA) jumped 71% over the last twelve months. On July 14th, Raymond James analyst Olivia Tong upgraded Ulta Beauty, Inc. (NASDAQ:ULTA) to an Outperform rating with a $395 per share price target. The analyst commented that the beauty category is set to recover post-COVID 19 with users replenishing their collection.
The hair care industry wasn't alone in feeling the pandemic shock. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
The stocks on our list were picked based on their fundamentals and prospects for growth based on key business characteristics. We also took into account analysts’ ratings and hedge fund sentiment while choosing these stocks. These haircare stocks have been ranked in order of the number of hedge fund holders, from the lowest to the highest.
Photo by Adam Winger on Unsplash
Best Hair Care Stocks to Buy Now
10. L'oreal (OTCMKTS:LRLCY)
Number of Hedge Fund Holders: 2
We start our list of the best hair care stocks to buy now with L'oreal (OTCMKTS:LRLCY). The France-based personal care company distributes beauty products ranging from hair color, shampoos, conditioners, and treatments. L'oreal (OTCMKTS:LRLCY) distributes to over 130 countries.
Earlier this year, L'oreal (OTCMKTS:LRLCY) announced its definitive agreement to acquire the J-beauty company Takami Co. The acquisition will support the expansion of LRLCY to the Asia Pacific region.
On August 4th, Deutsche Bank analyst Thomas Sykes raised the price target of L'oreal (OTCMKTS:LRLCY) to $486 from $480 per share and kept his Buy rating. On the same day, JPMorgan analyst Celine Pannuti raised the price target of the stock to $486 to $463 per share and kept his Overweight rating on the shares.
The company has a market cap of $258 billion. In the first quarter of 2021, L'oreal's (OTCMKTS:LRLCY) revenue came in at $9.02 billion, up 10.2% from the same period in 2020. The strongest performing sector was the company's active cosmetics, where sales were up 28.7% compared to the same period of 2020. Shares of L'oreal (OTCMKTS:LRLCY) jumped 41% over the last twelve months.
By the end of the first quarter of 2021, 2 hedge funds out of the 866 tracked by Insider Monkey held stakes in L'oreal (OTCMKTS:LRLCY), worth roughly $1.12 billion.
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and Coty Inc. (NYSE:COTY), L'oreal (OTCMKTS:LRLCY) is one of the best hair care stocks to buy now.
9. Natura & Co Holding S.A. (NYSE:NTCO)
Number of Hedge Fund Holders: 4
Natura & Co Holding S.A. (NYSE:NTCO) ranks 9th on the list of 10 best hair care stocks to buy now. The Brazil-based cosmetics company has operations in over 73 countries worldwide. Natura & Co Holding S.A. (NYSE:NTCO) offers personal care services through its brands The Body Shop and Aesop.
In 2020, Natura & Co Holding S.A. (NYSE:NTCO) acquired multinational cosmetics company Avon. The purchase placed NTCO as the fourth-largest beauty company with over 200 million consumers worldwide. Shares of Natura & Co Holding S.A. (NYSE:NTCO) jumped 18% over the last twelve months.
HSBC analyst Felipe Cassimiro initiated coverage on Natura & Co Holding S.A. (NYSE:NTCO) with a Buy rating, and a price target of $72 per share on July 7th, stating that global growth should be fueled by NTCO's marketing and innovation.
The company has a market cap of $2.48 billion. In the second quarter of 2021, the company's net loss in the first quarter came in at $29.86 million, a significant improvement from the net loss of $157.92 in the same period of 2020.
By the end of the first quarter of 2021, 4 hedge funds out of the 866 tracked by Insider Monkey held stakes in Natura & Co Holding S.A. (NYSE:NTCO), worth roughly $61 million
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), Coty Inc. (NYSE:COTY), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and L'oreal (OTCMKTS:LRLCY), Natura & Co Holding S.A. (NYSE:NTCO) is one of the best hair care stocks to buy now.
8. Regis Corporation (NYSE:RGS)
Number of Hedge Fund Holders: 10
Regis Corporation (NYSE:RGS) ranks 8th on the list of 10 best hair care stocks to buy now. The Minnesota-based American hair care company operates over 7,000 salons worldwide. Regis Corporation (NYSE:RGS) offers hair care services through its brands Supercuts, SmartStyle, MasterCuts, among others.
In January 2021, Regis Corporation (NYSE:RGS) re-purchased over 200 of its mall-based hair salons from The Beautiful Group, while the remaining 300 salons under the management of TBG are expected to shut down.
Loop Capital analyst Laura Champine upgraded Regis Corporation (NYSE:RGS) to a Buy rating, and raised the price target to $12 from $5 per share on February 1st, stating that RGS's conversion to a franchise model will support the company's margin and returns on its capital investment.
The company has a market cap of $271.64 million. In the second quarter of 2021, Regis Corporation (NYSE:RGS) reported an EPS of $0.72, beating consensus estimates of $0.16.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Regis Corporation (NYSE:RGS), worth roughly $173 million.
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), Coty Inc. (NYSE:COTY), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and L'oreal (OTCMKTS:LRLCY), Regis Corporation (NYSE:RGS) is one of the best hair care stocks to buy now.
7. Nu Skin Enterprises, Inc. (NYSE:NUS)
Number of Hedge Fund Holders: 19
Nu Skin Enterprises, Inc. (NYSE:NUS) ranks 7th on the list of 10 best hair care stocks to buy now. The Utah-based personal care and dietary supplement manufacturer was founded in 1984. Nu Skin Enterprises, Inc. (NYSE:NUS) offers hair care products for preventing and correcting hair through its products ageLOC and Epoch.
In January 2021, Nu Skin Enterprises, Inc. (NYSE:NUS) acquired ingredient maker 3i Solutions. Nu Skin Enterprises, Inc. (NYSE:NUS) will incorporate 3i ingredients in its new products to advance its formulation. Shares of Nu Skin Enterprises, Inc. (NYSE:NUS) increased 4% in the last three months.
In May, Deutsche Bank analyst Faiza Alwy raised Nu Skin Enterprises, Inc.'s (NYSE:NUS) price target to $64, up from $57 per share.
The company has a market cap of $2.72 billion and offers a dividend yield of 2.80%. In the first quarter of 2021, Nu Skin Enterprises, Inc. (NYSE:NUS) reported an EPS of $0.91, beating estimates by $0.19. The company's first-quarter revenue came in at $677 million, up from $635 million in the same period of 2020.
By the end of the first quarter of 2021, 19 hedge funds out of the 866 tracked by Insider Monkey held stakes in Nu Skin Enterprises, Inc. (NYSE:NUS), worth roughly $327 million.
Just Like Ulta Beauty, Inc. (NASDAQ:ULTA), Coty Inc. (NYSE:COTY), The Procter & Gamble Business (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and L'oreal (OTCMKTS:LRLCY), Nu Skin Enterprises, Inc. (NYSE:NUS) is one of the best hair care stocks to buy now.
6. Sally Beauty Holdings, Inc. (NYSE:SBH)
Number of Hedge Fund Holders: 19
Sally Beauty Holdings, Inc. (NYSE:SBH) ranks 6th on the list of 10 best hair care stocks to buy now. The Texas-based beauty supplies retailer distributes beauty products to over 3,700 stores in 12 countries. Sally Beauty Holdings, Inc. (NYSE:SBH) was founded in 1964 and markets hair glossary, toning shampoo, conditioner, heat-protecting spray, and pomade.
In 2020, Sally Beauty Holdings, Inc. (NYSE:SBH) purchased Canadian beauty products distributor LA Maison Ami-Co Inc. The acquisition will allow Sally Beauty Holdings, Inc. (NYSE:SBH) to expand its hair color and hair care brands throughout Quebec. Shares of Sally Beauty Holdings, Inc. (NYSE:SBH) rose 57% in the last twelve months.
Sally Beauty Holdings, Inc. (NYSE:SBH) was upgraded to Market Perform by analysts at Raymond James on July 14th. Analyst Olivia Tong sees potential in the company with its omnichannel presence.
Sally Beauty Holdings, Inc. (NYSE:SBH) has a market cap of $2.16 billion. In the fiscal third quarter of 2021, Sally Beauty Holdings, Inc. (NYSE:SBH) reported an adjusted EPS of $0.68, beating estimates of $0.62. At the end of the fiscal third quarter, the revenue of Sally Beauty Holdings, Inc. (NYSE:SBH) came in at $1.02 billion, beating consensus estimates of $979.19 million.
At the end of Q1 2021, 19 hedge funds tracked by Insider Monkey have stakes in Sally Beauty Holdings, Inc. (NYSE:SBH), worth $127 million.
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Disclose. None. 10 Best Hair Care Stocks to Buy Now is originally published on Insider Monkey.