COO

Cooper Companies ($COO): What Signal Does Management's 'Peak Sell → Bottom Buy' Pattern Send?

09/02/2025 21:24

The insider trading patterns at Cooper Companies ($COO) over the past year are sending clear signals to investors. When the stock hit its peak above $110 in September 2024, executives engaged in massive selling, and exactly one year later, as shares plummeted to the $65 range in September 2025, the same executives are now buying. Cooper Companies is a $13.1 billion medical device manufacturer operating CooperVision, a contact lens business, and CooperSurgical, which focuses on women's health products. The company holds leading positions in the global contact lens market and maintains technological advantages in specialty lenses like toric and multifocal products. It has also established a dominant position in women's health through products like the Paragard IUD and fertility treatment solutions. In September 2024, when shares traded near all-time highs, executives executed concentrated large-scale sales. EVP Daniel McBride sold approximately 115,000 shares at $106.18 on September 4th, collecting $12.2 million, while fellow EVP Brian Andrews disposed of about 25,000 shares at $105.90 on September 5th, securing $2.6 million. Most notably, President Albert White III sold 115,000 shares at $110.92 on September 19th, realizing $12.75 million. Their selling timing proved remarkably prescient. One year later, the situation completely reversed. On September 2, 2025, with shares collapsed to the $65 range, the same executives began buying. EVP Andrews purchased 1,525 shares at $65.68, while EVP McBride bought 3,000 shares at $65.04. Although the purchase volumes were smaller than previous sales, the timing represents a highly significant signal. The stock collapse stems from deteriorating fundamentals. In August 2025 earnings, Cooper Companies lowered its annual revenue guidance from $4.11-4.15 billion to $4.07-4.10 billion. Slowing contact lens demand in Asia and the Americas was the primary culprit, with particular concerns about weakening growth in China and U.S. markets. The stock plunged over 12% in a single day on this news. However, not all indicators are negative. Q3 earnings per share of $1.10 exceeded consensus estimates of $1.07, and adjusted annual profit guidance was actually raised to $4.08-4.12 per share. This suggests cost efficiencies and margin improvements are occurring despite revenue deceleration. The EMEA region continues showing solid 13.9% growth, indicating regional variations exist. Cooper Companies' current valuation appears quite attractive. The forward P/E of 15.36x represents a significant discount from the historical 33x and trades below the medical device sector average of 20x. The PEG ratio of 1.08 appears reasonable relative to growth rates. With a debt-to-equity ratio of 29.67%, financial health remains sound, and a current ratio of 2.12x indicates low short-term liquidity risk. Positive signals for investors are clear. First, insider buying at these levels sends a powerful message. Second, ongoing margin improvement trends suggest profit recovery potential. Third, EMEA's solid growth demonstrates the effectiveness of global diversification strategy. Fourth, current valuations appear to reflect excessive pessimism. Conversely, risk signals warrant attention. Whether contact lens demand weakness represents structural change or temporary softness remains unclear. The timing of China market recovery is unpredictable. Trump administration tariff policies create uncertainty for the medical device industry. Additionally, insider purchase volumes remain considerably smaller than previous sales. Key criteria for future investment decisions include signs of Asian market recovery in next quarter's results, sustainability of EMEA growth, and continuation of margin improvement trends. If Q4 2025 revenue approaches the lower end of guidance at $1.05-1.07 billion, additional downward revision risks cannot be ruled out. Overall, despite short-term headwinds, Cooper Companies maintains structural growth drivers from aging demographics and rising myopia rates. Insider buying at current levels likely reflects management's view that upside potential exceeds downside risk at these prices. However, given recovery pace may be slower than market expectations, a phased approach appears advisable.