11 Best Hair Care Stocks To Buy Now
In this article, we will take a look at the 11 best hair care stocks to buy now. If you want to skip our industry background and jump ahead to the top five stocks in this list, then take a look at the 5 Best Hair Care Stocks To Buy Now.
While hair care products may appear to be a modern phenomenon, their origins trace back thousands of years. Throughout history, humans have utilized various products to enhance their appearance. From homemade remedies to the thriving industry it is today, hair care and cosmetics have evolved significantly over time, reflecting both cultural practices and technological advancements.
The global hair care and beauty industries have traditionally been considered recession-resistant, as they fall within the consumer staples category, alongside essential items like groceries and cleaning supplies. In addition, given that numerous hair care and beauty brands also qualify as luxury products, the sector operates as a hybrid, blending features of consumer staples and luxury goods to provide the advantages of both. However, the COVID-19 pandemic challenged this perception. Lockdowns and consumer concerns about infection prompted widespread closures of retail and salon stores, resulting in weakened sales across the beauty and personal care product market back in 2022. In response to these challenges, industry leaders were forced to devise strategies to attract more consumers.
In 2022, the average American consumer spent approximately $86 on hair care products. Among these, shampoo emerged as the most profitable, generating sales of approximately $3.6 billion, followed by hair conditioner and hair coloring, with unit sales reaching 172 million units in the women's hair coloring category. More prevalently, hair growth treatments have gained significant attention in the beauty industry. As more consumers express interest in products that combat hair loss and thinning, the hair growth category has seen a surge in both unit and dollar sales in the United States. In 2022, dollar sales of hair growth products amounted to about $121 million. This category encompasses various product types, including oils such as rosemary oil, as well as more conventional hair care items like shampoo and conditioner, formulated with ingredients aimed at promoting hair growth or preventing hair loss.
The evolving fashion trends and growing awareness of new, safer, and more effective hair care products have fueled a notable surge in their usage, consequently driving growth in the global hair care market. According to a market report by Fortune Business Insights, the global hair care market is forecasted to expand from $99.53 billion in 2023 to $147.49 billion by 2030, representing a compound annual growth rate (CAGR) of 5.8% during the forecast period.
Investors are increasingly turning to shares of hair care companies as a hedge against potential periods of inflation. Some of the top players in the hair care sector that serve as effective choices include The Procter & Gamble Company (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and Ulta Beauty, Inc. (NASDAQ:ULTA), among others listed below.
Photo by Adam Winger on Unsplash
Our Methodology
In the process of compiling our selection of the best hair care stocks, we initially identified companies involved in hair care and the beauty industry. From this pool, we selected the stocks with the highest hedge fund investor participation in Q3 2023, designating them as the top hair care stocks to buy.
Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11. L’Oréal S.A. (OTC:LRLCY)
Number of Hedge Fund Holders: 3
L’Oréal S.A. (OTC:LRLCY) is a French personal care company headquartered in Clichy, Hauts-de-Seine, renowned as one of the world's largest cosmetics companies. Its extensive product line encompasses hair color, skin care, sun protection, makeup, perfume, and hair care products, catering to consumers worldwide.
As of the end of Q2 2022, three hedge funds held positions in L’Oréal S.A. (OTC:LRLCY), collectively valued at $893.01 million. The largest stake was held by billionaire Ken Fisher's Fisher Asset Management, which owned 10.72 million shares worth nearly $892.7 million.
L’Oréal S.A. (OTC:LRLCY) joins The Procter & Gamble Company (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and Ulta Beauty, Inc. (NASDAQ:ULTA) in the list of some of the best hair care stocks to buy now.
10. Olaplex Holdings, Inc. (NASDAQ:OLPX)
Number of Hedge Fund Holders: 13
Olaplex Holdings, Inc. (NASDAQ:OLPX) is a beauty company driven by science and technology. It operates through a global omni-channel platform, catering to professional, specialty retail, and direct-to-consumer (DTC) channels.
On November 8 2023, investment advisory firm Telsey Advisory reiterated a Market Perform rating on Olaplex Holdings, Inc. (NASDAQ:OLPX) stock while reducing the price target to $2 from $4.
As of the end of the third quarter of 2023, Insider Monkey's database showed that 13 hedge funds held stakes in Olaplex Holdings, Inc. (NASDAQ:OLPX), with a combined value of $30 million. This marked a decrease from the previous quarter, during which 18 hedge funds held stakes valued at $60 million.
9. Helen of Troy Limited (NASDAQ:HELE)
Number of Hedge Fund Holders: 17
Helen of Troy Limited (NASDAQ:HELE), headquartered in Texas, is a leading provider of consumer products across multiple regions, including the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through three segments: Home & Outdoor, Health & Wellness, and Beauty. Its diverse product range includes decorative hair accessories, shampoos, liquid hair styling products, treatment and conditioning products, as well as hair appliances.
Helen of Troy Limited (NASDAQ:HELE) demonstrated strong performance in the third quarter of fiscal 2024. Exceeding expectations, the company reported a revenue of $549.6 million and an adjusted EPS of $2.79 for Q3 fiscal 2024, surpassing the forecast of $541.87 million and $2.75 EPS.
At the end of the third quarter of 2023, 17 hedge funds in the database of Insider Monkey held stakes worth $203.5 million in Helen of Troy Limited (NASDAQ:HELE). Of these, Ken Fisher’s Fisher Asset Management was the largest stakeholder, with a stake worth approximately $57.35 million.
8. Nu Skin Enterprises, Inc. (NYSE:NUS)
Number of Hedge Fund Holders: 19
Nu Skin Enterprises, Inc. (NYSE:NUS) is headquartered in Utah and specializes in personal care products. Their diverse product line includes skincare systems, facial cleansers, moisturizers, anti-aging solutions, and body care items. Currently, the company offers a quarterly dividend of $0.39 per share, boasting an impressive dividend yield of 8.59% as of February 2. With a dividend growth streak spanning over 22 years, NUS ranks among the best hair care stocks to buy.
In the third quarter of 2023, Nu Skin Enterprises, Inc. (NYSE:NUS) demonstrated a robust financial position, closing the quarter with over $233.3 million in cash and cash equivalents. Additionally, the company distributed approximately $19.5 million to shareholders through dividends.
According to Insider Monkey's database for the third quarter of 2023, 19 hedge funds held stakes in Nu Skin Enterprises, Inc. (NYSE:NUS), up from 18 in the previous quarter. The collective value of these stakes exceeded $93.3 million.
7. Unilever PLC (NYSE:UL)
Number Of Hedge Fund Holders: 21
Established on September 2, 1929, Unilever PLC (NYSE:UL) is a British multinational fast-moving consumer goods company formed from the merger of British soap maker Lever Brothers and Dutch margarine producer Margarine Unie. The company is headquartered in London and boasts ownership of popular brands such as Comfort, Dove, Lifebuoy, Lux, Rexona, and Sunsilk.
As of the end of the third quarter of this year, 21 out of the 910 hedge funds in Insider Monkey's database had purchased and held shares of Unilever PLC (NYSE:UL). Among these, Ken Fisher’s Fisher Asset Management stands out as the largest hedge fund shareholder, with a $488 million investment in the company.
6. Coty Inc. (NYSE:COTY)
Number Of Hedge Fund Holders: 24
Coty Inc. (NYSE:COTY) is a French-American multinational beauty company specializing in the development, manufacturing, marketing, and distribution of professional and retail hair care products. Additionally, the company offers a range of fragrances, cosmetics, and skincare products to consumers worldwide.
According to Coty Inc. (NYSE:COTY)'s results for the first quarter of fiscal year 2024, the company experienced robust Q1 sales growth of 18%, surpassing expectations. Additionally, Coty recently raised its guidance for the first half of FY24 to +10-12%.
Coty Inc. (NYSE:COTY)'s Consumer Beauty segment reported a 10% increase in revenues for Q1, both as reported and on a like-for-like (LFL) basis, aligning with the growth of the global mass beauty market, which has shown resilience in demand. During the quarter, the company observed strong sales performance in color cosmetics, mass fragrances, and mass skin & body care products. Particularly noteworthy was the momentum in e-commerce, with over 25% like-for-like sales growth in the Consumer Beauty business.
After sifting through 910 hedge funds for their September quarter of 2023 shareholdings, Insider Monkey discovered that 24 had bought a stake in Coty Inc. (NYSE:COTY). Out of these, the firm’s largest shareholder is Israel Englander's Millennium Management with an investment worth $41.1 million.
The Procter & Gamble Company (NYSE:PG), The Estée Lauder Companies Inc. (NYSE:EL), and Ulta Beauty, Inc. (NASDAQ:ULTA) are met by Coty Inc. (NYSE:COTY) in the list of the best hair care stocks to invest in.
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Disclosure: None. 11 Best Hair Care Stocks To Buy Now is originally published on Insider Monkey.