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The Cooper Companies, Inc. (COO): Are Hedge Funds Right About This Stock?

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In the eyes of many investors, hedge funds are seen as delayed, outdated investment tools of a period lost to current times. Although there are over 8,000 hedge funds with their doors open today, Insider Monkey aim at the leaders of this group, around 525 funds. It is assumed that this group oversees the lion’s share of the smart money’s total capital, and by paying attention to their highest quality investments, we’ve spotted a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as useful, bullish insider trading sentiment is another way to look at the marketplace. As the old adage goes: there are many motivations for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).

The Cooper Companies, Inc.

Keeping this in mind, it’s important to analyze the recent info surrounding The Cooper Companies, Inc. (NYSE:COO).

What have hedge funds been doing with The Cooper Companies, Inc. (NYSE:COO)?

At the end of the second quarter, a total of 27 of the hedge funds we track held long positions in this stock, a change of 50% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably.

When using filings from the hedgies we track, Donald Chiboucis’s Columbus Circle Investors had the largest position in The Cooper Companies, Inc. (NYSE:COO), worth close to $64.4 million, comprising 0.5% of its total 13F portfolio. Coming in second is David Stemerman of Conatus Capital Management, with a $51.4 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Griffin’s Citadel Investment Group and Bruce Kovner’s Caxton Associates LP.

As industrywide interest increased, certain money managers were breaking ground themselves. Columbus Circle Investors, managed by Donald Chiboucis, assembled the biggest position in The Cooper Companies, Inc. (NYSE:COO). Columbus Circle Investors had 64.4 million invested in the company at the end of the quarter. David Stemerman’s Conatus Capital Management also made a $51.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Griffin’s Citadel Investment Group, and Bruce Kovner’s Caxton Associates LP.

How are insiders trading The Cooper Companies, Inc. (NYSE:COO)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the company in focus has seen transactions within the past half-year. Over the last half-year time period, The Cooper Companies, Inc. (NYSE:COO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to The Cooper Companies, Inc. (NYSE:COO). These stocks are C.R. Bard, Inc. (NYSE:BCR), Teleflex Incorporated (NYSE:TFX), CareFusion Corporation (NYSE:CFN), DENTSPLY International Inc. (NASDAQ:XRAY), and Mindray Medical International Ltd (ADR) (NYSE:MR). All of these stocks are in the medical instruments & supplies industry and their market caps are similar to COO’s market cap.

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