Warren Buffett’s Berkshire Hathaway has made significant changes to its stock portfolio, including a notable investment in Ulta Beauty. In the latest 13F filing, Berkshire disclosed the acquisition of approximately 690,000 shares of Ulta Beauty, valued at $266 million as of June 30. This move follows a reduction in Berkshire’s stake in Apple by half and the divestment of its entire stake in Snowflake and Paramount Global.

The investment in Ulta Beauty is seen as a vote of confidence in the beauty retailer’s future prospects. Ulta offers a diverse range of products, including mass-market and high-end cosmetics, fragrances, skincare, and hair care items. The company operates through approximately 1,400 retail locations and online, and its stock has seen a notable rise following the announcement, climbing as much as 16% during premarket trading.

Berkshire’s investment in Ulta Beauty is part of a broader strategy to diversify its portfolio beyond traditional financial services and industrial sectors. The company also purchased around one million shares of Heico, an aerospace parts maker, valued at $185 million. These moves reflect Berkshire’s intention to capitalize on favorable valuations and consistent free cash flow in companies like Ulta Beauty.

The endorsement from Berkshire Hathaway has led to increased investor interest in Ulta Beauty, with the stock experiencing a significant surge in value. Despite ongoing sales challenges, Ulta Beauty remains a strong player in the beauty industry, with a loyal customer base and a focus on expanding its distribution channels. The investment from Berkshire Hathaway provides a significant stamp of approval, indicating that the company is well-positioned for future growth and profitability.