Activist Calls for Cooper Cos. to Seek New CEO. What It Means for the Barron’s Stock Pick.

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Cooper Cos. stock has declined 34% this year and has fallen 16% over the past 12 months. (Dreamstime)

Key Points

Cooper Cos. shares rise after activist investor Jana Partners urges the company to search for a new CEO and evaluate selling a major business segment.
Jana Partners demands the company immediately initiate an external CEO search and evaluate selling its CooperSurgical women’s health business.
The activist hedge fund cites stock underperformance as a reason for its demands, noting that investor trust has been broken.

Shares of Cooper Cos. rose Friday after activist investor Jana Partners urged the medical-devices company to search for a new CEO and evaluate the sale of of a major business segment.

Cooper Cos. stock gained 0.2% to $53.90 in premarket trading on Friday after ending Thursday down 1.5%. Shares of the maker of contact lenses have fallen 34% and have declined 16% over the past 12 months.

That stock underperformance was a reason why Jana Partners demanded the company “immediately initiate” an external search for a new CEO while also evaluating the sale of its women’s health and fertility business, CooperSurgical.

“The path to rehabilitation as a public equity starts with a new CEO,” the activist hedge fund wrote in a letter Thursday. “Investor trust has been broken, and we believe confidence in Cooper’s CEO is beyond repair.”

“If the board has the misguided belief that a CEO change is unnecessary, we suggest it review the performance materials we are separately providing,” Jana Partners added.

Barron’s chose Cooper Cos. a stock pick on Aug. 7. Shares have declined 26% since then as of the closing bell on Thursday. The stock has fallen 29% since closing at $76.73 on Aug. 19, and has sharply dropped below key moving averages.

Write to Kit Norton at kit.norton@barrons.com

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