lundi 20 août 2018

Conviction of the moment part II: Ulta Beauty (ULTA)

Boys don’t care too much about their appearance. We may as well wear the same underwear for 3 days, if there wouldn’t be a woman around us, we wouldn’t give a shit. We would wear socks in our sandals. We would wear shirts that don’t match with our pants. We would be happy that way. But women try to bring us in their field of superficiality and appearances and we abdicate. 

Those fucking women are obsessed with beauty. That’s why they buy make-up and all that crazy stuff that costs a lot of cash and bring nothing concrete other than seduction and sex. Us, investors, put all our blood in our brains. Nothing is left for our dick. So we don’t care about that seduction game.

But, eventually, we grow old and we become alone. And then, alone with our hard-earned money, we’re seduced by pretty girls full of make-up but without any money. That’s where fortune and appearances meet. Fortune seeks beauty and beauty seeks fortune. That’s how it’s always been and how it always will be, whatever how many centuries will pass.

That’s why I believe in Ulta Beauty (ULTA), a chain of make-up stuff for women that’s been growing like fuck in the recent years.

Forward PE : 18
Average PE last 5 years : 37
Annual sales growth last 5 years : 22%
Annual EPS growth last 5 years : 29%
Average ROE last 5 years : 27
Current ROE : 37
Earnings growth next year (estimated) : 17%
Debt : Zero
Cash position + receivables:  About 4% of the market cap
Earnings predictability according to Value Line : 95%
Dividend and payout : 0%

Of course, there’s always Amazon. But in these shops, you can try the make-up that interests you. Also, you can ask questions to sellers. You could use the service of a professional make-up chick. You can see the tendencies. OK, the moat isn’t Grand Canyon’s size, but there’s a little moat at least and girls love to be with girls and put perfume and other shit on themselves and compare themselves with other chicks and blablabla. Also, contrary to Michael Kors or specific brands, that kind of shop won’t fade away with fads. The only real threat is Amazon, but Amazon is a threat for everything, or almost. I don’t spend a lot of my spare time thinking about Amazon.

8 commentaires:

  1. This is where investing marketplace value and sexual marketplace value meet. This article is a masterpiece on multiple levels. Men and women both need ULTA. Women need it to maintain their appearance of youth and beauty. Men need it to own a piece of a high growth company at a great price so that we can get richer.

  2. Makes more sense to me to buy Constellation Software at $921 here and just tuck it away. No contest imo, but thats what makes a market.

    1. If you do not ALREADY have a good chunk of your portfolio in Constellation Software, by all means this is a good time to buy it. The most recent issue of Investors Digest had a blurb wherein an analyst put a price target of $1,300 and a rating of outperform on Constellation Software.

    2. What about Supernus Pharma? I've owned it for over a year and am even. Going to keep it as it probably isn't a stock to hold for only one year and I like how either late stage drugs will fill the pipeline or the 600+ million in cash will. Holding on to see how it plays out in the next few years.

      I would also look at PBH or GC. PBH management has said the pipeline looks the best it has in years and GC has so many growth drivers between now and 2022 in my opinion its a "set and forget" type of stock.

    3. Supernus Pharma (SUPN) just clocked in at #3 in the new Fortune's 100 Fastest Growing Companies. I do not believe it was on the last last year. Here's the list:

    4. Everybody loves Constellation Software but a little diversification is important.

  3. I own a large amount of PBH and am holding for long term. They have some issues out west in their food distribution business. But their specialty foods businesses are doing well. As you said, Management stated many opportunities for growth and the CEO is truly a gem.

  4. For those interested in gambling stocks, here's a bit of data associated with gambling execs buying up a lot of their stock.