Ulta Salon (ULTA) is one of the best stocks in the market. The company runs upscale women’s salons that sell high-end cosmetics. Sales and profits are growing like gangbusters, but there’s something fishy here.
In the past year ULTA has lost two CFOs and just recently, its CEO. The CEO just left to be the CEO of Michaels Stores, which used to be a publicly traded company, went private, and is now getting ready to go public again. Maybe he’ll get a boatload of stock and options for doing this. Last October, Ulta lost its CFO after only 6 weeks on the job, it was said to be a mutual agreement. The prior CFO announced his departure last March siting a family health issue.
There’s little being said about why these executives are leaving. I don’t want ot hear “personal reasons” when you’re in a rapidly growing company with a great stock. The options alone are worth working there.
One Year Chart
Here’s ULTA”s one-year chart as of December 10th. The company hasn’t reported 4th quarter earnings yet, these are due out March 14th. The stock looks great here, with an entry point around $90 a share. ULTA is $89 today — and I could buy it here — but where’s the management? Furthermore, is management quiting because there’s something fishy going on in ULTA’s accounting? So far, nothing negative has come out about irregularities, so I’m not saying there is any. I’m just scratching my head as to why management is all bailing.
Fair Value
In my eyes ULTA is worth 35 times earnings, which is $119 and a nice gain from here. This is usually the type of stock I invest in, and it sucks there’s all this other stuff going on.
Sharek’s Take
Ulta Salon is one of the best stocks in the market, and I would love to own it. I feel there’s something going on, something I don’t know, and that’s scaring me away from the stock for now. ULTA stays on my radar.
View the Earnings Table here.View the Ten Year Chart here.
