Ulta Beauty was one of the first few counters I bought when I first ventured into the US market four years ago. I was impressed by the drive of its ex-CEO Mary Dillon and it is my perception that she has driven Ulta to greater height during her tenure. With the transition of CEO in March, Dave Kimbell is the new CEO. It’s never easy to take over a strong leader and it will take at least a few years for the new chief to establish himself.

Ulta recently announced its long term financial target and strategic priorities. I would have preferred the terms to be reverse, so that the focus is on the strategic priorities, instead of the financial target. Looking at the numbers, the first emotion I felt was underwhelming. Total net sales growing at 5% to 7% annually with diluted EPS at low double digit. It might have been that I am getting too used to the high top line growth of software companies, hence this initial feeling. Reading on to the strategic priorities, there are some interesting points such as its partnership with Google to leverage Ulta Beauty’s GlamLab Virtual try-on tool and its strategic investment and partnership with Adeptmind, a leading AI retail technology company. But my mind keeps focusing back to its low net sales growth.

Wanting to buy another counter and not wanting to inject more cash into the portfolio, I decided to divest my stake completely last night. For this portfolio incepted in Jan 2020, the average return of the counter is about 29%, 6.8k in absolute value. I am satisfied with the return.

The proceed sold was used to initiate a small position in nCino, a financial technology company that aims to streamline all customer and employee banking interactions with its comprehensive, cloud-based Bank Operating System. Came across this from one of my subscription services, and I have been sitting on this idea for a few months. What sways me finally is the development in the latest quarter where it has inked a deal with Wells Fargo and make an entrance into France partnering with a top institution With just a US$7b market cap, it does seem to have a long runway to grow.

I also took this opportunity to add more Veeva, Okta and Fiverr. Similar to nCino, Veeva has been very successful as a specialised SaaS company but in the healthcare sector. It is very much bigger with a market cap of US48b but should still have room to grow. Okta is in the identity business and with its acquisition of Auth0, it should continue to grow well in the foreseeable future. Finally, I continue to like the long term potential of Fiverr and so continue to build my position.

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