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The Cooper Companies (COO) Set to Join the S&P 500 Index

Zacks

The Cooper Companies Inc. COO, a Pleasanton, CA-based specialty medical device company, is scheduled to join the coveted S&P 500 benchmark after the market closes on Sep 22. The company is currently part of the S&P MidCap 400 index.

Notably, Cooper Companies will be replacing Starwood Hotels & Resorts Worldwide Inc. HOT in the S&P 500 index as the latter is set to be acquired by Marriott International Inc. MAR, a global leading lodging company. Cooper Companies will be added to the S&P 500 Global Industry Classification Standard (GICS) Health Care Supplies Sub-Industry index.

With a portfolio of 500 leading companies, that have approximately 80% coverage of the available market capitalization, the S&P 500 is an important metric for the U.S. equities. It is no wonder that the index is considered to be ‘the best single gauge for large-cap U.S. equities. It is therefore a big boost for the investors holding shares of Cooper which has successfully satisfied all the inclusion criteria needed to join the list.

COOPER COS Price

COOPER COS Price | COOPER COS Quote


Cooper has been an important player in the ophthalmic and women's healthcare market, courtesy of its CooperVision and CooperSurgical business units. Of the recent developments, the rollout of ‘Biofinity Energys Contact Lenses’ in the U.S. is a notable development as it has helped Cooper Companies gain considerable traction in the contact lenses market. In the ‘two-week silicone hydrogel market’, the FDA approval of Avaira Vitality (an upgraded version of Avaira) is also a significant development. In fact the product is expected to drive margins over the long haul.

Coming to the silicone hydrogel 1-day lenses platform, the MyDay lens is an important product of the company. With its recent rollout in Japan, the company progressed well in the last reported third quarter of fiscal 2016.

Cooper Companies is also gaining prominence through inorganic expansion. The acquisitions of Genesis and Recombine earlier this year have highly expanded the company's presence in the women healthcare market. Notably, both the partnerships have exclusively strengthened Cooper Companies’ IVF genetic testing platform.

In this regard we note that Cooper Companies posted a stupendous third quarter of fiscal 2016 recently, with adjusted earnings of $2.30 rising 16.8% from the year-ago quarter. Revenues increased 11.5% year over year (up 6% at constant exchange rate or CER, including acquisitions in both periods) to $514.7 million. The company expects full-year 2016 sales in the range of $1.94−$1.95 billion and adjusted earnings in the band of $8.32−$8.47 per share.

Key Picks

Currently, Cooper Companies has a Zacks Rank #3 (Hold).

One better-ranked stock in the broader medical sector is Baxter International BAX sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

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