High signal stocks #2 (Dec 21)

Hello and happy Sunday!

I just checked our database, and we added stock pitches from 2168 different investors to Yellowbrick in 2025.

Only 73 have a strong enough track record to have their stocks added to this weekly email.

I collected 155 unique stocks that I know these investors owned within the last 3 months and added them to a spreadsheet for Yellowbrick Premium members.

If there were any recent pitches in the Yellowbrick database for those stocks, I added links to the pitches in the spreadsheet as well. Note: the Yellowbrick pitches are just the most recent pitches for that stock. They may or may not be from the investor who qualified to have the ticker added to the spreadsheet.

If the stock ticker is in the spreadsheet multiple times, it means that multiple investors own it. In future weeks, if I add a ticker to the top of the sheet and it already exists in the sheet, it could either mean a new top investor owns it or the original top investor re-confirmed that they still own it.

The idea is for this to be an up-to-date index of stocks that I have confirmed top investors own. So when the stock is re-confirmed, or I learn a new top investor owns it, I will add it to the top of the list with the date. If I learn that the investor has sold it, I will strike it out.

Also, I’d love to see some good investors write up the stocks that have no recent pitches on Yellowbrick.

I’ll share one of the top stocks with free subscribers each week, but the full list will be for Yellowbrick Premium subs.

If you have any specific data you’d like me to add to the spreadsheet to make it easier to scan through (industry, market cap, valuation metric, etc), let me know and I’ll see what I can do.

Now, on to the free pitch.

As a reminder, this is an AI summary. It includes citations for the data, but should be double-checked. It is just meant to be a quick overview to help you determine if you want to dig in deeper.

The Cooper Companies (NASDAQ:COO) — Price: $81.50 | Mkt Cap: $16.1B | Fwd P/E: 18.0x | Net Leverage: 1.76x

The Cooper Companies is a global medical device company operating through two segments: CooperVision (67% of revenue), the world's second largest contact lens manufacturer by market share at 26%, and CooperSurgical (33% of revenue), a leading fertility and women's healthcare business.[1] The market is pricing COO as a challenged conglomerate, with shares down approximately 20% from it’s 52-week high and trading at a 30%+ discount to peer Alcon on forward P/E (18x vs. 27x), effectively assigning minimal value to the women's health franchise and ignoring margin expansion momentum.[2][3] In reality, the company delivered eight consecutive quarters of earnings beats, with FY2025 non-GAAP EPS up 12% YoY to $4.13 on 5% revenue growth, while free cash flow improved 51% to $433.7 million.[4] The balance sheet remains manageable with net leverage at 1.76x and $1 billion remaining under the share repurchase authorization, providing capital return optionality alongside debt reduction.[5] Management completed a Q4 reorganization generating approximately $50 million in annualized savings, guiding to FY2026 non-GAAP EPS of $4.45 to $4.60 (8-11% growth) and free cash flow of $575-$625 million, with a three-year FCF target exceeding $2.2 billion.[6] Notably, CEO Al White purchased $808,000 in stock on December 16, 2025 at $80.80/share, and multiple insiders added approximately $1.2 million in the past three months alongside the announcement of a formal strategic review following pressure from activist Jana Partners.[7][8] As the strategic review proceeds and operational improvements continue, re-rating to peer-level multiples (even at a modest 21-22x forward P/E, still below Alcon's 27x) on FY2026 EPS guidance implies 20-40% upside over the next 12 months.

Sources:
[1] CooperCompanies Q4 FY2025 Earnings Release, December 4, 2025: CooperVision revenue of $2.74B (67% of $4.09B total), CooperSurgical revenue of $1.35B (33%); market share data from CNBC analysis, October 2025.
[2] TradingView, December 19, 2025: COO stock down approx. 15-20% from 52-week high of $100.24; forward P/E of 18x calculated as $81.50 / $4.52 midpoint FY2026 EPS.
[3] StockAnalysis.com, December 2025: Alcon (ALC) forward P/E of 27.09x vs. Cooper forward P/E of approx. 18x.
[4] CooperCompanies Q4 FY2025 Earnings Release, December 4, 2025: FY2025 non-GAAP diluted EPS of $4.13 (+12% YoY); revenue of $4.09B (+5%); free cash flow of $433.7M vs. $288.1M in FY2024 (+51%).
[5] CooperCompanies Q4 FY2025 Earnings Release, December 4, 2025: Net debt $2.4B, leverage ratio 1.76x; $2B share repurchase authorization with approx. $1B remaining after $290M repurchased in FY2025.
[6] CooperCompanies Q4 FY2025 Earnings Release, December 4, 2025: ~$89M reorganization charges with ~$50M expected annual pre-tax savings; FY2026 guidance: revenue $4.30-4.34B, non-GAAP EPS $4.45-$4.60, FCF $575-$625M; long-term FCF target >$2.2B (FY2026-2028).
[7] SEC Form 4 Filing, December 16, 2025: CEO Albert White III purchased 10,000 shares at $80.80/share ($808,000); Defense World, December 19, 2025: insiders purchased $1.2M in shares over past three months.
[8] CooperCompanies Press Release, December 4, 2025: Board announced formal strategic review; Wall Street Journal, October 20, 2025: Jana Partners built stake and pressed for strategic alternatives.

YB PREMIUM PITCHES

This section is locked for Yellowbrick Premium subscribers only. You can upgrade to Yellowbrick Premium here.

THAT’S ALL FOLKS

Thank you so much for reading today’s email!

If you ever have any feedback, suggestions, or questions, you can just reply to this email or email me at [email protected].

Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick