Most investors aren’t willing to consider a stock as a potential buy after a recent rally, failing to realize that most of Wall Street’s activity today is driven by algorithms that look for just this sort of price action. The so-called momentum in a breakout stock can trigger further buys down the line, leaving behind all of those who weren’t willing to get in during the early days of what could become a double-digit rally.
This is the case for an unlikely name today, an under-the-radar player in the consumer staples sector, despite most of the market describing it—and treating it—like a consumer discretionary name. The stock under question here is Ulta Beauty Inc. (NASDAQ: ULTA), a name that, despite its recent 12.2% rally on its latest quarterly earnings release, is still a buy for those who are looking to compound their capital over the long run.
