Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) recently disclosed a new position in Ulta Beauty (NASDAQ: ULTA). According to its latest quarterly filing, Berkshire owns 690,106 shares of the cosmetics retailer, equating to a roughly 1.4% ownership stake. While Berkshire's $250 million investment is modest, considering its stock portfolio is currently valued at over $313 billion, it has been known to add to previous investments over time.

So, let's examine why Berkshire might have purchased Ulta Beauty and whether the stock is worth adding to your portfolio.

Despite its year-over-year revenue growth of 3.5% in the first quarter of its fiscal 2024, ended May 4, investors have shied away from Ulta Beauty in 2024. Shares for the cosmetic retailer are down nearly 24% year to date as management recently lowered its fiscal 2024 guidance, and its margins are shrinking.

Continue reading

Source Fool.com