STAA

As STAAR Surgical ($STAA) Shares Plunge 76%, Major Shareholder Scoops Up $13 Million in Stock

04/03/2025 00:39

STAAR Surgical Co. ($STAA) has seen significant insider buying activity from its major shareholder amidst a substantial decline in its stock price, capturing the attention of investors looking for potential value opportunities. The ophthalmic implantable lens manufacturer has experienced a steep decline in its share price, falling approximately 55% over the past year and a staggering 76% over three years. Particularly notable was the single-day plunge of nearly 25% on February 12, 2025, following disappointing forward guidance. However, amidst this sharp decline, Broadwood Partners, LP, a major shareholder, has been aggressively purchasing shares, suggesting potential confidence in the company's long-term prospects. According to SEC filings, Broadwood Partners acquired approximately 260,000 shares worth $1.93 million on February 12, 2025—the very day of the significant price drop. This was followed by additional purchases of over 115,000 shares on February 13 and more than 36,000 shares on February 14. The buying spree continued into late February and early March, with approximately 664,000 shares (worth about $5.7 million) acquired in just three days between February 27 and March 3, 2025. What's particularly noteworthy is the consistency of these insider purchases. Broadwood Partners continued buying shares from mid-March through early April, accumulating over 1.5 million shares worth approximately $13 million between December 2024 and early April 2025. This aggressive buying pattern becomes even more interesting when considered alongside STAAR Surgical's strong financial position. The company operates with zero debt while maintaining a substantial cash reserve of approximately $230.49 million. With total assets of $509.52 million and shareholder equity of $397.3 million, STAAR's short-term assets ($367.9 million) significantly exceed its short-term liabilities ($70.3 million), indicating robust financial health. Despite this solid financial foundation, the company's stock has continued to decline. In its Q2 2024 earnings report released in August, STAAR posted adjusted earnings of 15 cents per share, considerably below analysts' expectations of 24 cents, though revenue of $99.01 million exceeded the forecasted $95.20 million. This underperformance in earnings and concerns about future growth prospects have been primary drivers of the stock's decline. The February 2025 plunge appears to be specifically related to disappointing forward guidance. News reports from that period mentioned STAAR Surgical alongside Lyft as companies that had issued concerning forecasts, triggering significant market reactions. A Wall Street analyst commented, "Broadwood Partners' substantial buying activity likely reflects the major shareholder's assessment that the current stock price significantly undervalues the company's intrinsic worth. The concentrated buying during periods when the stock hit its lowest points is particularly telling." STAAR Surgical specializes in implantable lenses for ophthalmology, with particular strength in the Implantable Collamer Lens (ICL) market for myopia correction. The company competes with industry players like Alcon, Johnson & Johnson Vision, and Bausch + Lomb, carving out a niche in the growing global vision correction market. Despite the major shareholder's substantial buying activity, it remains uncertain whether STAAR Surgical's stock will see an immediate rebound. Without demonstrating improved growth prospects and restored profitability, price recovery may be limited in the short term. Nonetheless, significant insider buying typically reflects confidence in a company's long-term value. The consistent purchasing by a major shareholder like Broadwood Partners may indicate a positive assessment of the company's fundamentals. STAAR Surgical's upcoming earnings announcements and execution of growth strategies will likely be crucial variables determining the stock's future direction.

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