Finance
Warren Buffett's Berkshire Hathaway offers 'big stamp of approval' to beauty retailer Ulta
Berkshire Hathaway (BRK-B, BRK-A) is placing a bet on Ulta Beauty (ULTA).
On Wednesday, the Warren Buffett-led conglomerate revealed in a regulatory filing that it bought 690,106 shares in the beauty retailer in the second quarter, worth roughly $266 million as of the end of June. Ulta stock jumped over 11% on Thursday and continued to rally on Friday, up 14.6% since Berkshire disclosed its holdings.
The move is “a big stamp of approval,” BMO Capital Markets managing director and senior analyst Simeon Siegel told Yahoo Finance. “The beauty category has always been an attractive category.”
In addition to taking a stake in Ulta, Berkshire Hathaway added aerospace manufacturing company Heico (HEI) to its holdings and exited its positions in Snowflake (SNOW) and Paramount (PARA). Berkshire also trimmed shares of Apple (AAPL), among other names.
However, Berkshire’s stake in Ulta came as a surprise. The stock has had a tough year so far, though, which may have made it more attractive, in line with Buffett’s value-oriented investment philosophy. Shares of the retailer are down 23% since the beginning of the year.
“Warren Buffett is almost like the original value investor, and I think that that’s the way they looked at it,” said Loop Capital Markets managing director Anthony Chukumba, who has a Buy rating on Ulta stock. “We do like the fact that Berkshire got involved with the stock. It definitely lends credibility to the story.”
Ulta’s slowdown concerns
Ulta is one of the largest beauty retailers in the US and is set to expand into Mexico in 2025. In its most recent quarter, the company increased sales by 3.5% year over year to $2.7 billion, continuing a trend of strong growth and overall resilience in the beauty industry.
However, on April 2, Ulta Beauty CEO Dave Kimbell warned investors of “a slowdown in the total category across price points and segments.”
That spurred a sell-off in the stock, reflecting investors’ fears about a downturn in sales and increased competition from Sephora and Amazon (AMZN), particularly in the higher-end beauty segment.
According to Chukumba, those concerns seem “overblown.”
“Ulta has a great model,” he continued. “They have a completely debt-free balance sheet. They generate a ton of free cash flow. They buy back stock pretty aggressively. I think they’re going to initiate a dividend later this year, which will open up the stock to income investors as well.”
Siegel questioned whether Ulta is a healthy but more mature business or if it’s saturated and is no longer able to sustain its growth story.
“Ulta and Sephora have revolutionized the way [the] consumer shops beauty the last 15 years,” Siegel said. “The business has dramatically taken … share away from department stores in favor of the specialty beauty retailers, which are predominantly Ulta and Sephora. They’ve done a phenomenal job.”
However, “Ulta has now pivoted or has now cycled into the next leg of its maturity,” Siegel continued. “It’s no longer growing at the same level that it was growing.”
He added that it will be up to management to prove to shareholders that it can still grow.
In May, CEO Kimbell told shareholders, “I remain confident in our differentiated model, the resilience of the beauty category, and our ability to execute against our plans, but we have adjusted our annual guidance as we anticipate the dynamics we faced in the first quarter to continue for the balance of the year.”
Kimbell announced that the company will share more details at its investor day in October about its plan to drive long-term share growth.
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Harley-Davidson’s new CEO wants to transform how people think about the iconic motorcycle brand, so the company is trying something different.
This week, Harley announced a new strategy that focuses on lower-priced bikes, rather than relying on older, more affluent customers to buy its higher-margin touring models.
“Back to the Bricks builds on our core strengths and competitive advantages, harnessing the passion of our riders to deliver profitable growth for the Company and both our dealers and shareholders,” Harley CEO Artie Starrs said this week. “As we drive towards this new phase of growth, we remain committed to the craftsmanship and dedication that define our brand.”
Entry-level Harley-Davidsons cost about $13,000, while the higher-end Adventure Touring models average about $23,250, and the Premium Range &CVO models cost about $38,500, according to Reuters.
Harley’s new strategy targets a core profit of over $350 million from its motorcycle business by 2027 and over $150 million in cost reductions.
To kick off the new strategy, Harley is introducing Sprint, a new entry-level model powered by a smaller 440cc engine, later in the year.
What is Harley-Davidson’s “Back to the Bricks” strategy?
Harley’s new strategy relies on more than just pushing buyers toward cheaper vehicles to increase volume. The 123-year-old company has a set of five pillars on which it is building its future.
Harley-Davidson “Back to the Bricks” 5-point plan
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Deep appreciation of Harley-Davidson’s competitive advantages and legacy: The Company’s iconic brand, diversified and powerful revenue channels, and best-in-class dealer network provide a powerful foundation for growth.
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Renewed commitment to exclusive dealer network to drive enterprise profitability: Harley-Davidson’s dealers are a competitive advantage. The Company is planning actions to enable dealers to double profitability in 2026 and then double it again by 2029.
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Immediate actions to recapture share in areas where Harley-Davidson has right to win: Harley-Davidson has strong legacy equity in existing markets including new motorcycles, used motorcycles, Parts & Accessories, and Apparel & Licensing. The Company’s new strategy is focused on positioning the Company to regain share and drive meaningful volume growth in categories where it benefits from credibility, scale, and deep rider connection.
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Strong financial position with a path to stronger free cash flow and EBITDA margin: Cost and restructuring actions already underway support a path to stronger free cash flow and EBITDA margin over time.
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Bolstered management team with balance of fresh perspectives and institutional knowledge: Harley-Davidson has made a number of leadership appointments that support the Company as it leverages its innate strengths.
Written by Jitendra Parashar at The Motley Fool Canada
Dividend investing can be one of the simplest ways to build long-term wealth while creating a steady stream of passive income. But in my opinion, a good dividend stock is about much more than just a high yield. Beyond dividend yield, investors should also look for companies with durable businesses, reliable cash flows, and a history of rewarding shareholders consistently over time.
That’s exactly why many investors turn to financial stocks. Banks and asset managers often generate recurring earnings through lending, investing, and wealth management activities, allowing them to support stable dividend payments even during uncertain market conditions.
Two Canadian financial stocks that stand out right now are AGF Management (TSX:AGF.B) and Toronto-Dominion Bank (TSX:TD). Both companies offer attractive dividends backed by solid financial performance and long-term growth strategies. In this article, I’ll explain why these two financial stocks could be worth considering for income-focused investors right now.
AGF Management stock continues to reward shareholders
AGF Management is a Toronto-based asset manager with businesses across investments, private markets, and wealth management. Through these divisions, the company offers equity, fixed income, alternative, and multi-asset investment strategies to retail, institutional, and private wealth clients.
Following a 59% rally over the last 12 months, AGF stock currently trades at $16.67 per share with a market cap of roughly $1.1 billion. At current levels, the stock offers a quarterly dividend yield of 3.3%.
One reason behind AGF’s strong recent performance is its increasingly diversified business model. The company has expanded its investment capabilities and broadened its geographic reach, helping it perform well across varying market environments.
In the first quarter of its fiscal 2026 (ended in February), AGF posted free cash flow of $36 million, up 14% year over year (YoY), driven mainly by higher management, advisory, and administration fees. These fees climbed to $92.5 million as demand for the company’s investment offerings strengthened.
AGF has also been focusing on expanding its alternative investment business and introducing new investment products. With strong cash generation and growing demand for alternative investments, AGF Management looks well-positioned to continue rewarding investors over the long term.
TD Bank stock remains a dependable dividend giant
Toronto-Dominion Bank, or TD Bank, is one of North America’s largest banks, serving millions of customers through its Canadian banking, U.S. retail banking, wealth management and insurance, and wholesale banking operations.
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