Beauty retailer Ulta (ULTA) rounds out our list this week. The $6.3 billion firm owns approximately 450 big box stores spread across more than 40 states. That geographic footprint is significant. By spreading out a relatively small number of stores across a wide area, Ulta can focus on expanding is presence in regions that have already demonstrated the best performance. Those extra data points dramatically cut down the risks of expanding the firm's scale.
Ulta is about as niche as retail gets. The firm stocks more than 20,000 different products at each store, giving customers selection that they won't find in the beauty section of a more conventional retailer. And Ulta's size also affords it some big advantages. By buying high-margin beauty items (such as brand-name fragrances) in scale, the firm is able to pass on considerable savings to its customers.Ulta's valuation is a little bit less beautiful. The firm currently sports an earnings multiple of 45, which means that investors are already pricing in some pretty substantial growth right now. The firm will need to live up to those expectations if it wants to keep a share price in the triple-digits. That said, a debt-free balance sheet and plenty of cash on hand help to mitigate the pricey premium that investors are doling out for shares right now. So does the room for expansion that Ulta has here in the U.S. To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr.
Twitter and become a fan on Facebook.-- Written by Jonas Elmerraji in Baltimore.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV