STAA

As STAAR Surgical ($STAA) Plunges 60%, Major Shareholder Broadwood Partners Bets $12 Million on Recovery

03/26/2025 03:11

As STAAR Surgical's ($STAA) stock has plummeted over 60% in the past nine months, major shareholder Broadwood Partners has been aggressively buying shares, demonstrating remarkable confidence in the ophthalmology implant specialist. The stock has fallen from its June 2024 high of $47.61 to $17.46 as of late March 2025. Despite this downward trend, Broadwood Partners has invested approximately $12 million in STAAR shares over the past four months, drawing significant attention from investors. STAAR Surgical designs, develops, manufactures, and sells implantable lenses for the eye and related delivery systems. The company is particularly known for its Implantable Collamer Lens (ICL) products for myopia correction, positioned as an alternative to laser vision correction procedures. While STAAR sells its products globally, recent challenges in the Chinese market have negatively impacted its performance. A notable insider trading pattern emerged when Broadwood Partners substantially increased its purchasing volume around February 12, 2025, when the stock price dramatically dropped. From February 12-14, the firm acquired 411,430 shares for approximately $3.12 million, at an average price of about $7.70 per share—roughly one-sixth of the price from six months earlier. Broadwood continued its buying spree in late February through early March, purchasing an additional 663,761 shares for approximately $5.7 million over just three days. The firm then acquired another 338,540 shares for about $3 million from mid-to-late March. Notably, the purchase price has been trending upward, starting at $7.44 and recently reaching $8.98 per share. This persistent buying by the major shareholder stands in contrast to STAAR's current financial situation. The company has been struggling with recent performance, reporting $313.9 million in revenue with a net loss of $20.21 million over the trailing twelve months, translating to a loss of $0.41 per share. In its August earnings report last year, the company posted adjusted earnings of 15 cents per share, significantly below analyst expectations of 24 cents, though revenue of $99.01 million exceeded the forecasted $95.20 million. The company maintains a relatively stable financial position with $230.49 million in cash and short-term investments against just $38.74 million in debt, indicating financial flexibility despite challenging market conditions. Particularly interesting is the ownership structure involving Broadwood Partners and its affiliates. According to SEC filings, these transactions are directly owned by Broadwood Partners, L.P., and may be indirectly beneficially owned by Neal C. Bradsher, President of Broadwood Capital. Despite this complex ownership structure, the transactions essentially represent a consistent buying strategy from the same group. Industry observers note that the ophthalmology implant market has significant long-term growth potential, particularly with aging populations driving steady increases in vision correction demand. However, in the short term, STAAR's performance will likely depend on recovery in the Chinese market and successful new product launches. Despite the major shareholder's confidence, Wall Street analysts remain divided. As of August 2024, of 14 analysts, 9 recommended 'buy' or 'strong buy,' 4 suggested 'hold,' and 1 advised 'sell.' The median price target was $52.64, suggesting substantial upside potential from current levels. However, following disappointing guidance in February 2025, the stock dropped further and now trades near its 52-week low. While Broadwood Partners' continued purchasing may signal long-term value investment, without short-term performance improvements, stock recovery may remain limited. Investors should monitor STAAR's recovery in the Chinese market, new product launch plans, and upcoming quarterly results. Broadwood Partners' potential additional purchases will also likely influence the stock's performance significantly.

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