Cooper Companies Hits 52-Week High on Strong Q2 Results

Shares of major medical and dental supplies manufacturer The Cooper Companies Inc. (COO) scaled a new 52-week high of $164.17 in mid-day trading on Aug 28, eventually closing at $162.98 on the same day. In fact, shares of this company have been gaining momentum since it reported strong second-quarter fiscal 2014 (ended Apr 30, 2014) results on Jun 5.

COO's shares have recorded a healthy one-year return of 25.0%. Meanwhile, the company has a market cap of $7.8 billion while average volume of shares traded over the last three months stands at approximately 571,476.

Catalysts for Growth

Impressive second-quarter 2014 results, advancement of the contact lens unit at above-market growth rates, increase in COO’s market share driven by consistent progress with MyDay sales and growth at the Biofinity and Avaira product families contributed to the growth trajectory of this company.

COO commands almost one-third of the rapidly-growing specialty lenses, multifocal lenses and torics market. Meanwhile, it continues to gain traction by growing at two to three times (or about 12%) the market growth rate.

COO posted adjusted earnings of $1.64 in the second quarter, depicting a rise of 9.3% from $1.50 in the same quarter of 2013 and surpassing the Zacks Consensus Estimate by 3 cents. Revenues grew 7.4% to $412.3 million and were in line with the Zacks Consensus Estimate.

COO continues to be favorable impacted by strong contribution from silicone hydrogel or one-day lens sales, partly negated by the uncertainty surrounding the use of contact lenses by cash-strapped consumers in the global markets, particularly in the European nations. A fall in the dropout rate of contact lens wearers and further market penetration, especially in developing nations, is expected with continuous technological advancement.

COO upgraded the lower-end of its 2014 adjusted earnings guidance to the range of $6.80–$7.00 from the earlier band of $6.75–$7.00. The current Zacks Consensus Estimate of $6.91 lies within the guided range.

Revenue outlook for fiscal 2014 remains stable at the $1,685-$1,725 million range. The Zacks Consensus Estimate for the same is pegged at $1,722 million which lies within the guided range.

Zacks Rank

Currently, COO carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering include McKesson Corp. (MCK) in the medical/dental Supplies industry and Alphatec Holdings, Inc. (ATEC) and ERBA Diagnostics, Inc. (ERB) in the medical instruments industry. While McKesson holds a Zacks Rank #2 (Buy), Alphatec and ERBA carry a Zacks Rank #1 (Strong Buy).

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