Morningstar's David Krempa has his eye on Cooper Companies, the third largest lens manufacturer in the world. Why? It's thanks to its strategy which offers daily disposable contact lenses.

Cooper Companies has earned a reputation for consistently delivering strong financial results due to its valuable relationships with optometrists. It reported USD 412.3 million in sales last quarter. The new daily disposable lenses offer at least twice as much operating profit, and are expected to provide a significant opportunity for growth in the future. The transition into daily lenses will occur over the next three years.

Until Cooper Companies completes the roll-out, Krempa thinks the company remains an undervalued asset. He warns, though, that charging consumers more for daily lenses may seem like a risky strategy. However he doesn't think that consumers will mind the cost because of the savings they will make on contact solution.