A Member of Pat McKeough’s Inner Circle recently asked for his advice on The Cooper Companies, a global medical device company with two main divisions: contact lenses and women’s healthcare devices.
Pat likes the track record of rising revenue as well as its recent acquisitions, which have let it expand into gynecology and obstetrics. The outlook for both its healthcare sectors remains steady.
The Cooper Companies Inc. (Symbol COO on Nasdaq; www.coopercos.com), is a California-based healthcare business with two operating segments.
The first segment is Cooper Vision (75% of revenues); it manufactures and markets soft contact lenses for the vision-correction market worldwide. It specializes in lenses for common eye conditions like astigmatism, presbyopia, and ocular dryness.
The second, Cooper Surgical (25%), develops and markets the medical devices, diagnostic products, and surgical instruments and accessories used by gynecologists and obstetricians.
Cooper has made a couple of acquisitions over the last few years.
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In December 2021, it completed the acquisition of Generate Life Sciences for $1.6 billion. Generate Life Sciences was created in 2018 through the merger of California Cryobank Life Sciences, an industry-leading donor sperm and egg bank, and Cord Blood Registry, a leading provider of newborn stem-cell services. The combined firm aimed to serve families from preconception to post-birth.
In November 2023, Cooper completed the acquisition of certain medical device assets from Cook Medical for $300 million. The assets acquired included a large portion of Cook’s Maternal Fetal Medicine products, gynecological surgery products and the Doppler monitor technology (ultrasound).Te
The Cooper Companies: Rising sales and profits spurred by key acquisitions
In the three months ended October 31, 2024, the company’s total revenue rose 9.8%, to $1.02 billion from $927.1 million. Excluding one-time items, the company earned $208.5 million, or $1.04 a share in the latest quarter. That was up 20.4% from $173.2 million, or $0.87.
All in all, the outlook for both of Cooper operating units is positive given their strong market positions in vision correction and medical devices for the gynecology and obstetrics fields.
Recommendation in Pat’s Inner Circle: The Cooper Companies Inc. is okay to hold.
