Ulta Beauty Inc. (ULTA) stock has climbed steadily in 2021, jumping +24.7%. And it could be just ramping up as the beauty brand plans for more stores, technology investments, and a media network. But another likely reason is due to Big Money lifting the stock.
So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.
Smart money managers are always looking for the next hot stock. And Ulta has many fundamental qualities that are attractive.
This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.
You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.
That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals ULTA has made the last year.
The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:
In 2021, the stock has attracted 12 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.
Now, let’s check out technical action grabbing my attention:
- Year-to-date outperformance vs. Consumer Discretionary Select Sector SPDR Fund (+9.52% vs. XLY)
Outperformance is important for leading stocks.
Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Ulta has been growing sales at a double-digit rate. Take a look:
- 1-year sales growth rate (+19.8%)
- 1-year earnings growth rate (+9.2%)
Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.
In fact, ULTA has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock saw buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
ULTA has a lot of qualities that are attracting Big Money. And since 2015, it’s made this list 23 times, with its first appearance on 3/16/2015… and gaining 147.34% since. The blue bars below show the times that Ulta was a top pick since 2015:
It’s been a top stock in the consumer discretionary sector according to the MAPsignals process. I wouldn’t be surprised if ULTA makes additional appearances in the years to come. Let’s tie this all together.
The Bottom Line
The Ulta rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.
Disclosure: the author does not hold ULTA positions in personal or managed accounts at the time of publication.
Learn more about the MAPsignals process here.
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