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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: garrick le who wrote (41803)	5/25/1999 1:39:00 PM
From: SMALL FRY	Respond to of 120523

I'm just watching mostly today... except for momentum rides here and there... lots of (short) sellers in SPDE at 8 - 8 1/4. SF

To: garrick le who wrote (41803)	5/25/1999 1:46:00 PM
From: Jenna	Respond to of 120523

COO just came out of a week long hold with this (see below) BEBE just like TAGS, except BEBE coming of a double bottom now. this one I had for months but got stopped out a few weeks ago and its been down ever since. NSOL is sitting on support 62 1/4.. resistance forget its 10 points away. If it gets above 62 3/4, I'll consider it. Waiting for the spread to narrow. Cooper Cos.: More Visible Upside Analyst: Bob Hirschfeld 5/19/99 Shares of Cooper Cos. (NYSE:COO - news) rose more than 20% on May 12 after the contact-lens maker announced it had recovered from a disappointing first quarter and expects to beat earnings estimates for the second fiscal (April) quarter. The company expects to earn $0.34 per share, more than analysts are expecting. It is also nearly double what it netted in the first quarter and 31% better than what it earned in the same quarter a year ago. Cooper's contact lens sales rank third behind Johnson & Johnson (NYSE:JNJ - news) and Bausch & Lomb (NYSE:BOL - news) . The company also makes gynecological products but sold its psychiatric services business last October. Cooper has a particularly strong market position in toric contact lenses, which address the needs of those with astigmatism. The company is currently number two in U.S. toric market share, and aims to become number one by year-end and the global leader by year-end 2000. In fact, in the first quarter, revenue rose 19% to $35 million while income from operations grew 13%. So, what was the problem? This increase was more than offset by interest costs predominantly associated with the purchase of Aspect Vision Care. Cooper also reported production problems. In addition, 1998's first quarter was boosted by a foreign exchange gain of 4 cents per share that did not recur in 1999's first quarter. As a result, first quarter pretax earnings from continuing operations decreased from $0.32 cents per share in 1998 to $0.28 per share. However, analysts are encouraged by the company's recent bullish announcement about the second quarter. And Charles Olsziewski of PaineWebber, who rates the shares "Buy," notes that independent market research confirmed that Cooper's toric lens business grew by 32% in the most recent quarter, twice the industry-wide rate. Suey Wong, an analyst with Robert Baird who has a long-term "Market Outperform" on the shares, notes three additional positives. One, the company's FemExam Test Card, which tests for bacterial vaginosis, should receive a Medicare code prior to year-end, a move that should contribute to greater long-term acceptance. Two, by the end of April, Frequency 55, Cooper's one-month replacement toric lens, will be capable of helping people with a broader array of cases. Three, the analyst cites the company's launch of innovative products, like the Frequency AB lens, which better helps patients with myopia, and "should allow eye doctors to trade their patents up to a more value-added product in this commodity like segment." As a result, analysts think Cooper's shares are still attractive despite the recent runup. Cooper is expected to earn $2 per share in fiscal (October) 2000. This means its stock, which closed Tuesday at $21.06, is trading at less than 11 times next fiscal year's estimate. PaineWebber analyst Olsziewski notes that two nearly-comparable companies, Wesley-Jessen (NASDAQ:WJCO - news) , which focuses more on fashion contact lenses, and Ocular Sciences (NASDAQ:OCLR - news) , which focuses more on disposables, command market multiples of about 15 to 16 on estimated 2000 earnings. Were the same standard applied to Cooper, its shares would trade up to $30 on Olsziewski's 2000 estimate. Adds Wong: "The shares are timely, as Cooper appears to have reached an inflection point." Bottom Line: Cooper shares seem attractive, especially given that the company still holds a strong position in the contact lens market.