In this article, we discuss 11 best hair care stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Hair Care Stocks To Buy Now.
The global hair care market is forecasted to expand at a compound annual growth rate of 6.6% over the next five years. Following the pandemic-driven lockdowns and lack of normal accessibility to salons, consumers globally have picked up new self care habits, including do-it-yourself (DIY) beauty regimes. Resultantly, DIY hair coloring is largely trending. The demand for natural, organic, cruelty free, and vegan hair care products is also on the rise as accountability increases in the beauty industry, in addition to celebrity endorsements and growing awareness. Manufacturers are enhancing their product lines by investing significantly in research and development to introduce organic/natural and clean-label ingredients in their hair care products, including shampoos and conditioners, organic hair oils, and hair masks etc. These products are expected to experience resilient growth over the forecast period of 2022 to 2027.
Dandruff is a very common condition, which can lead to hair fall. Hair fall could also result from multiple factors, including genetics, hormonal imbalances, aging, and more. Approximately 70 million Americans experience hair loss. By the age of 35, two-thirds of males already lose some or all of their hair and it also impacts about 50% of women in the United States. Scalp psoriasis is another critical factor which can accelerate growth in the hair care market. The global hair care market was valued at $82.3 billion in 2022. IMARC Group expects the market to reach $107.2 billion by 2028, exhibiting a CAGR of 4.4% during the forecast period of 2023 to 2028.
To benefit from this growing industry, some of the best hair care stocks to invest in include The Estée Lauder Companies Inc. (NYSE:EL), Ulta Beauty, Inc. (NASDAQ:ULTA), and The Procter & Gamble Company (NYSE:PG).
Our Methodology
We selected the following hair care stocks based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged according to the number of hedge fund holders in each firm.
Copyright: jetcityimage / 123RF Stock Photo
Best Hair Care Stocks To Buy Now
11. L’Oréal S.A. (OTC:LRLCY)
Number of Hedge Fund Holders: 2
L’Oréal S.A. (OTC:LRLCY) is a French manufacturer and seller of cosmetic products for women and men worldwide. The company operates through four divisions – Consumer Products, L’oréal Luxe, Professional Products, and Active Cosmetics. It offers shampoos, hair care products, skin care products, hair colors, styling products, deodorants, sun care products, makeup, and perfumes. On October 20, L’Oréal S.A. (OTC:LRLCY) stock gained after the company reported strong Q3 sales, supported by solid demand for cosmetics and consumer products. The French beauty giant posted €27.94 billion in revenue, up from €23.19 billion in the prior year.
On December 1, Citi analyst Cedric Besnard upgraded L’Oréal S.A. (OTC:LRLCY) to Neutral from Sell with a price target of EUR 365, up from EUR 355. The analyst said the stock’s recent de-rating is enough to bring the focus onto the company’s relative defensiveness as the backdrop in the sector deteriorates. The analyst noted that L’Oréal S.A. (OTC:LRLCY)’s relative valuation has returned to “more normal’ territory.
According to Insider Monkey’s third quarter database, Ken Fisher’s Fisher Asset Management is the biggest position holder in L’Oréal S.A. (OTC:LRLCY), with 12.45 million shares worth $805.6 million.
Like The Estée Lauder Companies Inc. (NYSE:EL), Ulta Beauty, Inc. (NASDAQ:ULTA), and The Procter & Gamble Company (NYSE:PG), L’Oréal S.A. (OTC:LRLCY) is one of the best hair care stocks to invest in.
Here is what ClearBridge Investments International Growth ACWI ex-U.S. Strategy has to say about L’Oréal S.A. (OTC:LRLCY) in its Q4 2021 investor letter:
“Economies in Asia, meanwhile, are taking the opposite approach on stimulus, with China lowering its reserve requirement ratio for banks to support flagging growth in the world’s second largest economy. Japan’s new government passed a large stimulus bill after its economy contracted in the third quarter. Despite these actions, sentiment remains decidedly negative in these regions. We continue to see solid consumer demand in Asia, which has benefited our luxury and cosmetics holdings L’Oreal.”
10. Natura &Co Holding S.A. (NYSE:NTCO)
Number of Hedge Fund Holders: 3
Natura &Co Holding S.A. (NYSE:NTCO) was founded in 1969 and is headquartered in São Paulo, Brazil. The company manufactures, distributes, and sells cosmetics, fragrances, and personal hygiene products. Natura &Co Holding S.A. (NYSE:NTCO)’s products portfolio includes body care, face care, makeup, soaps, hair care, deodorants, oils, and other products. On November 10, the company reported a Q3 net income of R$560 million and a revenue of R$9 billion.
On October 19, JPMorgan analyst Joseph Giordano upgraded Natura &Co Holding S.A. (NYSE:NTCO) to Overweight from Neutral with a price target of $8, up from $7. The analyst has become “increasingly constructive” on Natura &Co Holding S.A. (NYSE:NTCO) over the past months, noting that management is growing initiatives to improve results and add shareholder value.
According to Insider Monkey’s data, 3 hedge funds were bullish on Natura &Co Holding S.A. (NYSE:NTCO) at the end of September 2022, compared to 6 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 1.04 million shares worth $5.70 million.
9. Nu Skin Enterprises, Inc. (NYSE:NUS)
Number of Hedge Fund Holders: 13
Nu Skin Enterprises, Inc. (NYSE:NUS) was founded in 1984 and is headquartered in Provo, Utah. The company develops and distributes beauty and wellness products worldwide. Nu Skin Enterprises, Inc. (NYSE:NUS) has a broad range of hair care products, which makes it one of the premier hair care stocks. The company paid a $0.385 per share quarterly dividend to unitholders on December 7.
On December 20, DA Davidson analyst Linda Bolton Weiser raised the price target on Nu Skin Enterprises, Inc. (NYSE:NUS) to $40 from $34 and kept a Neutral rating on the shares.
According to Insider Monkey’s third quarter database, Nu Skin Enterprises, Inc. (NYSE:NUS) was part of 13 hedge fund portfolios, compared to 12 funds in the last quarter. Jim Simons’ Renaissance Technologies is the leading position holder in the company, with 2.5 million shares worth $84.8 million.
8. Olaplex Holdings, Inc. (NASDAQ:OLPX)
Number of Hedge Fund Holders: 18
Olaplex Holdings, Inc. (NASDAQ:OLPX) was founded in 2014 and is based in Santa Barbara, California. It manufactures and sells hair care products, including hair care shampoos and conditioners for use in treatment, maintenance, and protection of hair. On November 9, Olaplex Holdings, Inc. (NASDAQ:OLPX) reported Q3 non-GAAP earnings per share of $0.11 and a revenue of $176.45 million, outperforming Wall Street estimates by $0.01 and $0.2 million, respectively. Although the company trimmed net sales outlook for full-year 2022, it is still higher than the market consensus. Olaplex Holdings, Inc. (NASDAQ:OLPX) is one of the best hair care stocks to invest in.
On November 16, Canaccord analyst Susan Anderson initiated coverage of Olaplex Holdings, Inc. (NASDAQ:OLPX) with a Buy rating and an $8 price target. Olaplex Holdings, Inc. (NASDAQ:OLPX) “has finally hit a bump in the road,” but she believes there is growth ahead, the analyst told investors. While investors have concerns about “sky-high” margins coming down, she does think they will come down as the company invests to grow.
According to Insider Monkey’s data, 18 hedge funds were bullish on Olaplex Holdings, Inc. (NASDAQ:OLPX) at the end of Q3 2022, and Brett Barakett’s Tremblant Capital held the largest position in the company, comprising 1.90 million shares worth $18 million.
Here is what ClearBridge Mid Cap Growth Strategy has to say about Olaplex Holdings, Inc. (NASDAQ:OLPX) in its Q3 2021 investor letter:
“Within capital markets, the U.S. initial public offering (IPO) market remained active with $27 billion in deals during the third quarter, while chunky secondary offerings from private holders weighed on selected equities. We remained selective in the new issue market, participating in the IPO of Olaplex Holdings in the consumer staples sector. Olaplex is a marketer of hair care products targeting a massive consumer market where it is less than 1% penetrated. The company possesses a differentiated model driven by 1) a patented “bond building” ingredient, 2) a devout stylist community and social media presence that is larger than its mass channel peers, and 3) a fully outsourced model that borders on licensing.”
7. Sally Beauty Holdings, Inc. (NYSE:SBH)
Number of Hedge Fund Holders: 20
Sally Beauty Holdings, Inc. (NYSE:SBH) is a Texas-based specialty retailer and distributor of professional beauty supplies. The company offers beauty products, including hair color and care products, styling tools, skin care products, cosmetics, and other beauty products for retail customers and salon professionals through retail stores and digital platforms. The company expects comparable sales for full-year 2022 to increase by low single digits compared to the prior year, supported by growth in key categories, sales transfer from store closures, the expanded Regis distribution, and new strategic initiatives. Sally Beauty Holdings, Inc. (NYSE:SBH) is one of the best hair care stocks to invest in.
On December 15, Piper Sandler analyst Korinne Wolfmeyer initiated coverage of Sally Beauty Holdings, Inc. (NYSE:SBH) with an Overweight rating and a $15 price target. With the company’s transformational phase now nearing completion, Sally Beauty Holdings, Inc. (NYSE:SBH) is positioned well to report consistent comp growth and margin expansion over the long term, the analyst told investors in a research note.
According to Insider Monkey’s third quarter database, 20 hedge funds were long Sally Beauty Holdings, Inc. (NYSE:SBH), with collective stakes worth $165 million, compared to 18 funds in the prior quarter worth $104.3 million. Ken Fisher’s Fisher Asset Management is the largest position holder in the company, with 3.5 million shares worth $44.7 million.
6. Helen of Troy Limited (NASDAQ:HELE)
Number of Hedge Fund Holders: 23
Helen of Troy Limited (NASDAQ:HELE) is a Texas-based provider of consumer products in 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 product range includes decorative hair accessories, shampoos, liquid hair styling, treatment and conditioning products, and hair appliances. Helen of Troy Limited (NASDAQ:HELE) on October 5 reported a Q3 non-GAAP EPS of $2.27 and a revenue of $521.4 million, outperforming Wall Street estimates by $0.06 and $2.33 million, respectively.
On December 22, DA Davidson analyst Linda Bolton Weiser upgraded Helen of Troy Limited (NASDAQ:HELE) to Buy from Neutral with a price target of $126, up from $115. The analyst believes that an “inflection point” for the stock has arrived as IRI data suggests a “possible beat” when the company reports earnings next month.
According to Insider Monkey’s data, 23 hedge funds were bullish on Helen of Troy Limited (NASDAQ:HELE) at the end of Q3 2022, compared to 20 funds in the prior quarter. Dmitry Balyasny’s Balyasny Asset Management is a prominent stakeholder of the company, with 208,481 shares worth $20 million.
In addition to The Estée Lauder Companies Inc. (NYSE:EL), Ulta Beauty, Inc. (NASDAQ:ULTA), and The Procter & Gamble Company (NYSE:PG), Helen of Troy Limited (NASDAQ:HELE) is one of the hair care stocks on the radar of smart investors.
Wedgewood Partners made the following comment about Helen of Troy Limited (NASDAQ:HELE) in its Q3 2022 investor letter:
“Helen of Troy Limited (NASDAQ:HELE) was a detractor in the quarter as the Company continues to deal with a variety of headwinds. The Company’s healthcare and housewares businesses were major beneficiaries during the pandemic, and both we and the Company have been expecting a normalization of demand in this business. Further, the post-pandemic normalization of demand patterns at major customers such as Walmart, Target, and Amazon have further weighed on the Company – both in terms of fundamentals and in terms of market sentiment, plus stock valuation. Finally, decades-high inflation in key consumer staples categories such as food and other necessities has diverted some spending away from the more discretionary product categories supplied by Helen of Troy. Despite all these headwinds, the Company has been able to hold on to most of the business that it gained during the Pandemic. Revenues in the most recent quarter were +26% above the same quarter two years ago, and we find the stock’s valuation to be extremely attractive at the moment, at levels last seen in the 2008- 2009 recession period, when the Company was under former (and, in our opinion, inept) management.”
Click to continue reading and see 5 Best Hair Care Stocks to Buy Now.
Suggested articles:
Disclosure: None. 11 Best Hair Care Stocks To Buy Now is originally published on Insider Monkey.
