The past year hasn’t been the greatest for Lake Forest-based Cooper Cos.
The maker of contact lenses and women’s surgical equipment has seen its shares lose almost half their value since October, stoked by earnings disappointments, lost market share and lowered guidance in recent months.
But some suggest that Cooper’s recent insider stock trades could be a positive sign because purchases carry more weight than sales among those who observe such transactions.
At first glance, the trend looks gloomy: Cooper insiders have sold nearly $30 million worth of the device maker’s shares, while buying less than $700,000 worth, according to an article in The Wall Street Journal two weeks ago.
“Other factors, however, suggest that the overall message from Cooper insiders could be positive,” the report said.
The Wall Street Journal argued the company’s insiders receive much of their pay through stock-based awards, so diversifying through share sales could be a prudent step. Conversely, when a corporate insider spends his or her money to buy shares, it’s viewed as a sign of confidence.
In July, three Cooper insiders spent some $556,000 for 12,750 shares of the device maker. The average price was $43.60 a share. Cooper’s shares were trading around $43.27 a share as of late last week.
Chief Executive A. Thomas Bender reported spending $436,000 on 10,000 Cooper shares on July 7. The report also noted that Bender was a timely seller, having shucked off 356,000 shares last year for more than $70 a share, mostly after exercising stock options.
The newspaper report found that most of the stock sales came from John Fruth, a Cooper director who received his shares after Cooper spent $1.2 billion for Ocular Sciences Inc., the company Fruth founded, in early 2005.
Fruth, Ocular’s former chairman, has sold some $28 million worth of Cooper stock.
His sales are neither unusual nor should they be looked at with undue alarm, said Jonathan Moreland, director of research for Insiderinsights.com, in the report.
“It is definitely not uncommon for people who have acquired shares in that fashion to simply cash out,” Moreland said.
Cooper wasn’t supposed to have a challenging period. Hopes were high after Cooper bought Ocular.
That deal boosted Cooper from the middle to the top ranks of contact lens makers and honed its focus on specialty lenses. Shortly after buying Ocular, Bender said Cooper believed “we will continue to grow faster than the market, which we have been doing on the Street for quite a few years.”
Instead, Cooper has taken a few blows. In January, it said it was going to restate its results for part of 2004 and 2005 because of accounting issues related to its buy of Ocular.
Cooper also delivered disappointing results for the quarter ended April 30, with profit tumbling 51% to $13.7 million from a year earlier, while revenue was up 1% to $212 million.
Analysts had expected Cooper to earn $32 million on revenue of $221 million.
Valeant Looks at Appeal
Costa Mesa-based Valeant Pharmaceuticals International said earlier this month that it’s exploring an appeal of a case that was tried in Orange County Superior Court.
Caleel & Hayden LLC, a Denver-based cosmetics marketing company, was awarded $2.4 million in damages in a dispute over Valeant’s termination of a distribution deal for its Kinerase skin care product line.
Valeant said it would record the award as a charge to its second-quarter results, which are due Thursday.
“We were very disappointed with the jury’s verdict in this case,” said Chief Executive Timothy Tyson in a release. “We intend to pursue all legal options available to the company.”
They Moved, Then Sold
Regulators have signed off on Healthways Inc.’s $308 million buy of LifeMasters Supported SelfCare Inc., a disease management company that was based in Irvine before moving to South San Francisco last year.
Healthways, out of Nashville, Tenn., is a rival to LifeMasters. The deal is expected to close Sept. 1.
LifeMasters, which has some 600,000 patients, runs a Web site that lets patients track medical records, appointments and prescriptions.
Patients also can interact with nurses and other healthcare professionals via the site.
Its financial backers included Intel Corp. and Pacific Life Insurance Co.
LifeMasters was established in 1994.
The company moved to the Bay area because its chief executive, David Strand, lives there.
Christobel Selecky, LifeMasters’ former chief executive and current executive chairman, works out of the company’s Irvine office.
Bits and Pieces:
Community Care Health Centers, Huntington Beach, received $550,000 in grants from the Weingart Foundation and the California Health Facilities Financing Authority. The funds will be used to add health-related technology at its clinics and for renovations … Alliance Imaging Inc., Anaheim, is providing mobile resonance imaging services for DeSoto Imaging Services in Mississippi, across the state line from Memphis, Tenn.
