STAA

Major Shareholder Bets $12 Million on STAAR Surgical ($STAA) - Insiders Signal Confidence After Stock Plunge

03/21/2025 00:02

STAAR Surgical ($STAA), a specialist in implantable contact lenses, has seen its major shareholder Broadwood Partners aggressively increasing its stake following a significant stock price decline, sending a potentially strong signal to investors. After $STAA shares plummeted more than 28% on February 12, 2025, Broadwood Partners has executed a series of substantial purchases totaling approximately $12 million over the past three months. This concentrated buying activity suggests insiders may believe the stock has bottomed out. The company's stock has suffered considerably over the past year, dropping more than 50% from its 52-week high of $52.68 to current levels around $18. However, shares have rebounded nearly 19% in the past month, potentially indicating a recovery is underway. STAAR Surgical is a leading manufacturer of implantable contact lenses (ICLs), particularly known for its EVO Visian ICL product for vision correction. The company's implantable lenses serve as an alternative to LASIK and other laser procedures, with particularly strong market penetration in Asia. What stands out is the insider buying pattern. While Broadwood Partners has been consistently purchasing shares since December 2024, it significantly accelerated its buying after the February crash. In just three days from February 12-14, it acquired 411,430 shares worth approximately $3.1 million, followed by an additional 663,761 shares (about $5.7 million) between late February and early March. The persistent buying might be supported by the company's relatively solid financial foundation. $STAA maintains over $230 million in cash against just $38.7 million in total debt. This low debt-to-cash ratio and strong liquidity position suggest minimal financial distress risk. However, recent performance has been problematic. In its Q2 earnings announced in August 2024, while revenue increased by 7.3% to $99.01 million, exceeding expectations, earnings per share came in at $0.15, below the market forecast of $0.24. Then in February 2025, the stock crashed after the company provided disappointing forward guidance. Over the trailing twelve months, $STAA reported $313.9 million in revenue but posted an operating loss of $12.61 million and a net loss of $20.21 million, highlighting ongoing profitability challenges. The net margin of -6.44% continues to concern investors. Despite these concerns, Broadwood Partners' persistent buying signals strong confidence in the long-term growth potential. The worldwide increase in myopia prevalence and growing popularity of ICL procedures in Asian markets could serve as future growth catalysts. Additionally, the robust gross margin of 76.32% reflects product competitiveness and premium positioning. Significant insider buying often suggests positive internal developments or value that the market is overlooking. Broadwood Partners and its affiliates were already major shareholders of $STAA, and substantially increasing their position after the stock's decline likely indicates action based on internal knowledge or conviction. With a current market capitalization of approximately $870 million, $STAA trades at 2.76 times sales and 2.18 times book value, representing a considerable discount from historical valuation levels. Given the recent insider activity, the current price may represent an attractive entry point for medium to long-term investors. Key factors to watch going forward include potential performance recovery in 2025 and improvements in profitability. If the company can optimize its cost structure and drive sales growth in its core markets, the current stock weakness may prove temporary. However, continued losses and intensifying market competition remain significant risk factors.

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