Hey sven, i think some important things that should be noted for $ULTA: 1. Big safety is brand loyalty (95% customers are loyalty members) 2. Almost always growth on revenue (except for pandemic) 3. Related to point 1, most girls have high brand loyalty and adore the points system to buy their products from ULTA 4. The makeup industry requires that you 'renew' your makeup every 2-3 years, so people in pandemic may be set to renew their products. 5. US market is probably maturing but in Canada (they wanted to expand in 2020), there is no competitor to sephora here - so the next closest vendor is Shoppers Drug Mart but even this is not a substitute for ULTA's potential market position. I think it's a good investment at 15PE and has good ROIC & ROE; and have 20 shares currently.
I would discount the 95% customer loyalty. There loyalty program is free and anyone can join. If it costed like $20 a year and they had a high rate of customer loyalty, I’d say it’d matter because you can be sure that people feel there is an incentive to revisit the stores.
Edit: What's your cost basis? 1. They have to discount their product. So 95% of sales are at a discount. 2. Growth has slowed considerably. Number of stores (growth driver) had slowed considerably. 3. Girls don't have to buy from ULTA so they are not loyal to ULTA but to Revlon, for example. And they will go with the cheapest option. 4. Women push off renewal if they don't have money. 5. They ditched the Canada expansion plan in favor of Mexico.
@@PopeyeSailor-wz7ew 1. Discounts are for the current environment where people have less money to spend - if not for clearing inventory (which I don't think is the case). 2. Growth has slowed. Personally I see this as a macro environment consequence but I could be wrong (maybe its US market saturation). 3. Girls (and even just people) usually shop where they find comfort. Ulta has a good return policy and the ambience is friendly - in my opinion I like this for a company I'm invested in. 4. I read that not to be true. The study I read about highlights makeup as a small luxury treat for women in hard economic times. 5. True. Who knows where they expand. My cost basis is 390$/share. I believe it's reached its lowest point (from a technical trading point of view). If it drops below 300$/share I will try to buy more.
I also did my own analysis on ULTA and completely agree with what you said. I started a small position, hoping it goes down further to add at better prices.
Something else to keep in mind is that beauty products are HUGE right now, but that this was not always the case. In the 90s, there was a kind of anti-glamor reaction, because of how crazy the 80s were. Who knows, maybe in a decade or two there is a lot less interest in beauty products as a reaction to how crazy it is now. Culture often behaves in waves like that.
In 1996, Starbucks started expanding internationally and a share was $2. Their stock price has increased over 4500% at present $. Don’t know that Ulta will see the same results but that would be quite tasty!
1. Starbucks revolutionized coffee. We went from paying 35 cents for bottomless coffee to paying $4 for a cup. 2. Everyone in America was aware of Starbucks before the expansion. 3. Same store sales were exponential. 4. Starbucks didn't have to discount its product. 5. Coffee is addictive.
Great video, Sven, thanks! Have you ever looked at the difference at specialisation vs global value search? There are a couple value investors in norway i follow closely who have done 40% cagr the last decade, mostly specialising in 3 industries in Scandinavia. Would love to hear your thought
After talking to some lady friends, I learned that most had purchased a lot of makeup during the covid times. Now with inflation they have cut back on spending on makeup and have enough to last many, many months. Hard times ahead for this industry.
@@SigFigNewton"The time to buy this is the slow down." Correct. I tend to agree with Sven: we aren't quite there yet. Sub-15 P/E is best and earnings have a bit lower to go. U might want to review this stock's performance in 2017 and 2019. Those were hellacious drawdowns.
Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.
The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have a great deal of skill and knowledge to pull such trades off.
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from Desiree Ruth Hoffman, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
Buy low, sell high. Buy undervalued businesses, sell overvalued businesses. There is no strategy in this. The trick is that nobody will predict the future and buying a cheap stock today does not necessarily mean it will go up in the future.
Hi Sven, very good video, extremely interesting as usual What do you think about the "Lipstick effect" in case of a recession. The beauty is not completely discretionary I think.
your framework for thinking about stocks plus the patience you show is extremely useful. thx Sven. i am almost looking forward to a recession to observe how all these interesting stocks behave. and to buy more.
You definitely have my sub. This content is next level. For me Unimantic was the turning point. Please keep doing what you do and keep being you, love it.
Thanks for the walk through of the company! What do you think about NRDE? Nu ride is a special situation, it is what is left after the fraud and crash of lordstown. Essentially it looks like the exit company carry more cash than the market cap. Since it basically is a spac the bet is on the current management and what they will do with that cash. Is it a cigar butt that young Buffet would taken the last puff on?
I don't think that model will work in Europe, if that is their next step after SA. Most people in Europe do not go to malls to buy stuff, that is why malls keep failing all across Europe. So a megastore mall-like beauty shop is not going to work. The products themselves may work if they are sold in standard shops, but the "all in one model" won't. I have seen plenty of Sephora stores, and most of them are small shops with the selection of items. I have never seen a mega Sephora store.
Ulta specifically seeks out easy to access stores..like if they are in a strip mall they are easy access..they don’t go into mega malls..this was sephoras old model so when the malls dropped foot traffic Sephora became not as convienient..ulta built in easier to access stores. Stand alone/strip malls. Not inside a mall
@@JackDespero at current valuations, given the strong history of share buybacks, Ulta simply has to not shrink in order to be a good value. I’m biased, of course. I’m long.
Sven what's your opinion that ULTA is all over TH-cam overpromoted and now also in the investing channels like yours (because of the comments). Reminds me Tesla, Bitcoin etc shilling case
Looks to me like Ulta has a system that works just like McDonald's, they have high ROE so if the business model travels then they can expand just like McDonald's
I lost over $70k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Natalie Strayer
I'm surprised that you just mentioned Natalie Strayer here also Didn’t know she has been good to so many people too this is wonderful, i'm in my fifth trade with her and it has been super.
Natalie Strayer has really set the standard for others to follow, we love her here in Canada 🇨🇦 as she has been really helpful and changed lots of life's
Her good reputation already speaks for her .I’m also one of the beneficiary of Natalie Strayer. So happy I gave it a trial after being skeptic of the process.
Yeah I think it’s priced super cheap now..$300 stock..it’s reliable and makes money they should help it trade at a premium. Once this recession mess is done. Market is panicking to downside for recession that may or may not come. That alone is what makes it cheap..if recession comes..ok a lot is priced in..if no recession you make quick 30-40% here. As others have said Mexico and Canada could take this stock to $600. Dividends could help too..
kind of a long-shot, but id like to see some uranium part of the market commentary. and if not a general comment, maybe a look into any of the tickers: UUUU, UEC, KAP (id really like to hear about this one), LEU puno pozdrava iz zagreba
I was at the lumber yard today. The "men" at the lumber yard had longer painted nails than the girls clerking at the grocery store. Strange business to say the least.
Don't you think you focus too much on the quantitative? I mean you would need to know about the make up industry to undertsand what this company has to offer
Honestly, I don't understand why you're discussing these dubious schemes. There are plenty of options like Unimantic and similar ones that are fast and profitable.
When you said the word fast, I automatically knew you are doing something wrong. If youre having fun with stocks youre doing something wrong. Dont confuse a Bull market with you being a genius
I still remember back in 2018 people talking the same about Walgreens. It is a compounder, dividend aristocrat, great business, great margin UNTIL IT WASN'T
Hey sven, i think some important things that should be noted for $ULTA:
1. Big safety is brand loyalty (95% customers are loyalty members)
2. Almost always growth on revenue (except for pandemic)
3. Related to point 1, most girls have high brand loyalty and adore the points system to buy their products from ULTA
4. The makeup industry requires that you 'renew' your makeup every 2-3 years, so people in pandemic may be set to renew their products.
5. US market is probably maturing but in Canada (they wanted to expand in 2020), there is no competitor to sephora here - so the next closest vendor is Shoppers Drug Mart but even this is not a substitute for ULTA's potential market position.
I think it's a good investment at 15PE and has good ROIC & ROE; and have 20 shares currently.
I would discount the 95% customer loyalty. There loyalty program is free and anyone can join. If it costed like $20 a year and they had a high rate of customer loyalty, I’d say it’d matter because you can be sure that people feel there is an incentive to revisit the stores.
Edit: What's your cost basis?
1. They have to discount their product. So 95% of sales are at a discount.
2. Growth has slowed considerably. Number of stores (growth driver) had slowed considerably.
3. Girls don't have to buy from ULTA so they are not loyal to ULTA but to Revlon, for example. And they will go with the cheapest option.
4. Women push off renewal if they don't have money.
5. They ditched the Canada expansion plan in favor of Mexico.
@@PopeyeSailor-wz7ew 1. Discounts are for the current environment where people have less money to spend - if not for clearing inventory (which I don't think is the case).
2. Growth has slowed. Personally I see this as a macro environment consequence but I could be wrong (maybe its US market saturation).
3. Girls (and even just people) usually shop where they find comfort. Ulta has a good return policy and the ambience is friendly - in my opinion I like this for a company I'm invested in.
4. I read that not to be true. The study I read about highlights makeup as a small luxury treat for women in hard economic times.
5. True. Who knows where they expand.
My cost basis is 390$/share. I believe it's reached its lowest point (from a technical trading point of view). If it drops below 300$/share I will try to buy more.
@@dawoodibrahim8036
And ULTA will be expanding into Mexico next year in partnership with a strong international partner.
I also did my own analysis on ULTA and completely agree with what you said. I started a small position, hoping it goes down further to add at better prices.
thanks for sharing!
Something else to keep in mind is that beauty products are HUGE right now, but that this was not always the case. In the 90s, there was a kind of anti-glamor reaction, because of how crazy the 80s were. Who knows, maybe in a decade or two there is a lot less interest in beauty products as a reaction to how crazy it is now. Culture often behaves in waves like that.
good point!
Also With lower birth rates less young women as customers
@@johnl.7754Lol with the way the world is now Vs the 80s and 90s, soon women won't be the only gender that shops here 😅
Yes this is true, I know plenty of men (myself included) shop at Ulta.
There was no Instagram in the 90’s
Great Video Sven, still waiting for Mc Donalds:) would say Great Business at a fair Price. Looking for the next Videos. BR
Good day Mr. Sven! Thanks for another thorough analysis 🙌
Great analysis Sven. I've analyzed ULTA with my students and it's definitely an interesting business. We will see how it goes!
In 1996, Starbucks started expanding internationally and a share was $2. Their stock price has increased over 4500% at present $. Don’t know that Ulta will see the same results but that would be quite tasty!
1. Starbucks revolutionized coffee. We went from paying 35 cents for bottomless coffee to paying $4 for a cup. 2. Everyone in America was aware of Starbucks before the expansion. 3. Same store sales were exponential. 4. Starbucks didn't have to discount its product. 5. Coffee is addictive.
Great video, Sven, thanks! Have you ever looked at the difference at specialisation vs global value search? There are a couple value investors in norway i follow closely who have done 40% cagr the last decade, mostly specialising in 3 industries in Scandinavia. Would love to hear your thought
interesting, thanks for sharing!
Can you provide name of these investors?
After talking to some lady friends, I learned that most had purchased a lot of makeup during the covid times. Now with inflation they have cut back on spending on makeup and have enough to last many, many months. Hard times ahead for this industry.
Covid restrictions ended over 2 years ago, I feel like those supplies must surely be running low
That’s why now is the time to buy
This is the slowdown
@@SigFigNewton"The time to buy this is the slow down." Correct.
I tend to agree with Sven: we aren't quite there yet. Sub-15 P/E is best and earnings have a bit lower to go.
U might want to review this stock's performance in 2017 and 2019. Those were hellacious drawdowns.
Purchasing a stock may seem straightforward, but selecting the correct stock without a proven strategy can be exceedingly challenging. I've been working on expanding my $210K portfolio for a while, and my primary obstacle is the lack of clear entry and exit strategies. Any advice on this matter would be greatly appreciated.
The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have a great deal of skill and knowledge to pull such trades off.
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from Desiree Ruth Hoffman, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
Buy low, sell high. Buy undervalued businesses, sell overvalued businesses. There is no strategy in this. The trick is that nobody will predict the future and buying a cheap stock today does not necessarily mean it will go up in the future.
Can you please make a video on luxury companies like LVMH and Kering? Hermes doesn't look that attractive to me now
Thanks Sven for your content. Could you cover some Hongkong property stocks Like Swire Group or Jardine? Would ne interesting :)
Hi Sven, very good video, extremely interesting as usual
What do you think about the "Lipstick effect" in case of a recession. The beauty is not completely discretionary I think.
What about Lanxess from a value perspective?
your framework for thinking about stocks plus the patience you show is extremely useful. thx Sven. i am almost looking forward to a recession to observe how all these interesting stocks behave. and to buy more.
Great to hear!
great analysis. Have you had a look at CELH?
Not yet!
You definitely have my sub. This content is next level. For me Unimantic was the turning point. Please keep doing what you do and keep being you, love it.
why turning point?
@@zenastronomybecause people get comfort from confirmation bias haha
And what is keep being you ? Lol.
Thank you Sven. I would like to suggest looking at ABEV stock.
what is going on there? will check!
Thanks Sven. Great video. What do you think about Sixt preference stock? The stock is falling sharply recently
Thanks Sven, I would love to see a review of LULU. Cheers!
I think my wife bought something recently, thus the stock will boom!!!
@@Value-Investing😂
LULU to the moon, Francois Rochon wouldn't lie to me :)
Thank you for your research. I find your videos are well done. Right now I'm keeping an eye on Unimantic.
Hi Sven, can you make a video for books to buy please.
Thanks for the walk through of the company! What do you think about NRDE? Nu ride is a special situation, it is what is left after the fraud and crash of lordstown. Essentially it looks like the exit company carry more cash than the market cap. Since it basically is a spac the bet is on the current management and what they will do with that cash. Is it a cigar butt that young Buffet would taken the last puff on?
Love this brand and stock! My mum, cousin and girlfriend could live in one store..
thanks for sharing :-)
I don't think that model will work in Europe, if that is their next step after SA.
Most people in Europe do not go to malls to buy stuff, that is why malls keep failing all across Europe.
So a megastore mall-like beauty shop is not going to work.
The products themselves may work if they are sold in standard shops, but the "all in one model" won't.
I have seen plenty of Sephora stores, and most of them are small shops with the selection of items. I have never seen a mega Sephora store.
They do a lot of online business
Ulta specifically seeks out easy to access stores..like if they are in a strip mall they are easy access..they don’t go into mega malls..this was sephoras old model so when the malls dropped foot traffic Sephora became not as convienient..ulta built in easier to access stores. Stand alone/strip malls. Not inside a mall
@@JackDespero at current valuations, given the strong history of share buybacks, Ulta simply has to not shrink in order to be a good value. I’m biased, of course. I’m long.
Sven what's your opinion that ULTA is all over TH-cam overpromoted and now also in the investing channels like yours (because of the comments). Reminds me Tesla, Bitcoin etc shilling case
I've heard about Ulta some longer time ago on this channel and did my 25% in few Months with them
Looks to me like Ulta has a system that works just like McDonald's, they have high ROE so if the business model travels then they can expand just like McDonald's
Thank you for consistent teaching 🙏
My pleasure
been holding since 2010. Happy to say the least. Bought more recently cheapest by PE it has ever been.
I’ve been buying over the last couple months!
How about MNST stock? It is close to its 52-week low. A good buy or a fair reflection of slowed growth?
don't know about the trend there
Great Video Sven. Thank you
Glad you enjoyed it
I lost over $70k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Natalie Strayer
I'm surprised that you just mentioned Natalie Strayer here also Didn’t know she has been good to so many people too this is wonderful, i'm in my fifth trade with her and it has been super.
Natalie Strayer has really set the standard for others to follow, we love her here in Canada 🇨🇦 as she has been really helpful and changed lots of life's
The very first time we tried, we invested $2000 and after a week, we received $9500. That really helped us a lot to pay up our bills.
I'm new at this, please how can I reach her?
Her good reputation already speaks for her .I’m also one of the beneficiary of Natalie Strayer. So happy I gave it a trial after being skeptic of the process.
Yeah I think it’s priced super cheap now..$300 stock..it’s reliable and makes money they should help it trade at a premium. Once this recession mess is done. Market is panicking to downside for recession that may or may not come. That alone is what makes it cheap..if recession comes..ok a lot is priced in..if no recession you make quick 30-40% here.
As others have said Mexico and Canada could take this stock to $600. Dividends could help too..
wow great job, looks really good, bought a small amount
thanks for sharing!
kind of a long-shot, but id like to see some uranium part of the market commentary. and if not a general comment, maybe a look into any of the tickers: UUUU, UEC, KAP (id really like to hear about this one), LEU
puno pozdrava iz zagreba
puno pozdrava!
Sven did some uranium videos in 2018-2019, at the bottom of the market. (Not these exact miners, but who cares)
Hi Sven, would love your perspective on LPSN (NASDAQ)!
thanks for suggesting!
Ulta's Mexico thing is half-baked at best, clearly feeling the heat from LVMH, and Europe would be even harder. Waiting for a lower price for sure
thanks for sharing!
What about Televisa $TV from Mexico? 🎉
Can you review avpt stock? Its doing software protection for Microsoft and other big companies...
thanks for suggesting!
Agree on the analysis. Great company but risk/reward ratio right now doesn't make it a compelling investment
thanks!
thanks for sharing!
I was at the lumber yard today. The "men" at the lumber yard had longer painted nails than the girls clerking at the grocery store. Strange business to say the least.
😂 tf
:-))))
Don't you think you focus too much on the quantitative? I mean you would need to know about the make up industry to undertsand what this company has to offer
you see the qualitative from the quantitative too!
You are right Sven good business so farbut competition is very strong amd sephora has a better model then ulta,ask to a girl
good point, thanks for sharing!
Honestly, I don't understand why you're discussing these dubious schemes. There are plenty of options like Unimantic and similar ones that are fast and profitable.
Investing is about making money.
When you said the word fast, I automatically knew you are doing something wrong. If youre having fun with stocks youre doing something wrong. Dont confuse a Bull market with you being a genius
Huh? Berkshire Hathaway just made a meaningful investment in ULTA.
Go listen to someone who tells you what you like, we are enjoying his analysis
looks very interesting!
thanks!
Nice analysis
Mexico plus their private tech/AI fund.
ULTA at PE of 12 today.
I still remember back in 2018 people talking the same about Walgreens. It is a compounder, dividend aristocrat, great business, great margin UNTIL IT WASN'T
If someone said great margin then that was their problem lol
@@Daniel-ld3ziwhy?
@@DK-qf6pr profit margin was always around 5% and gross margin was in a steady trend down.
In 2018 their net margin was 3.8%.....not that great even for a retail company. They had a FCF of around 7b and were already overpriced by x2.
Unlike Ulta, Walgreens has an egregious amount of debt
Analyse Burford Capital
thanks for suggesting!
next: LULU
coming soon then!
Also keep in mind, when consumers run out of money, they tend to stop being “wants” like beauty products and are only able to afford “needs”. Caution
corect
Too bad they dont pay a dividend.
:-(
🥇
And the medal to prove it 🙌
Retail, the “widow maker”.
yep
Beauty has always been recession and inflation proof. Almost as good as cigarettes and booze.
but they aint millenial zoomer proof
@@georgesamaras2922 Why not? Millennials and zoomers are also vain and frivolous! 😜
beauty yes, but this is a bit different because you can spend on them pampering you or not...
Ulta is a cannibal stock. They are buying back stock worth 1 billion in 2024 alone. I havent seen anyone mentioning that.
it is mentioned in the video!
ELF is. Better buy
Could you please be so kind to tell us why?
thanks for sharing!
Too expensive
:-)