Clean up of dredged material, hazardous waste and drill cuttings is a growth industry. These type companies either grow or get bought out. This play is going to make us money
CODI acquires Clean Earth Holdings Inc. ("Clean Earth"). The acquisition is expected to close by the end of August, subject to customary closing conditions.
Headquartered in Hatboro, Pennsylvania, Clean Earth provides environmental services for a variety of contaminated materials including soils, dredged material, hazardous waste and drill cuttings. The company analyzes, treats, documents and recycles waste streams generated in multiple end-markets such as power, construction, oil and gas, infrastructure, industrial and dredging. Treatment includes thermal desorption, dredged material stabilization, bioremediation, physical treatment/screening and chemical fixation. Before the company accepts contaminated materials, it identifies a third party "beneficially reuse" site such as commercial redevelopment or landfill capping where the materials will be sent after they are treated. In 2013, Clean Earth managed and treated 3.4 million tons of material, of which 98% was beneficially reused. The company holds the largest market share in the contaminated materials and dredged material management market and operates 12 permitted facilities in the Eastern U.S. For the year ended December 31, 2013, Clean Earth reported revenue of approximately $155.9 million.
CODI's ownership in FOX was lowered from approximately 53% to 41%
They no longer own a controlling interest so they will not have to consolidate accounting
I'd just as soon seen CODI rid itself entirely of Fox, or at least drop the ATV, ORV, and snowmobile parts. Those are destructive and unnecessary vehicles America would be better off without.
If I were forced to sell that could be true. On a longer term basis unless they decide to reduce the dividend or they go bankrupt, I could lock in a very nice return. In my model (I'm more of an investor than a trader) short term weakness does nothing except provide buying opportunities. As for the risk of bankruptcy/dividend reductions, I would be very interested in hearing about those types of projections. Again, this is my first real look at CODI but the model seems okay and the cash ratios seem very acceptable. I have a little more reading to do first but I expect I will be adding some of this to my portfolio
As we have stated in our previous call FOX is no longer included in our calculation of our cash flow following the successful completion of the company’s August 2013 IPO, in which CODI generated debt and equity proceeds totaling approximately $142.4 million. FOX’s results however will continue to be consolidated with the results of our other subsidiaries until our ownership percentage drops below controlling interest.
Compass Diversified's (CODI) CEO Alan Offenberg on Q1 2014 Results - Earnings Call Transcript
Sentiment: Strong Sell
I first starting purchasing CODI shares in April 2010. I decided to sell a few weeks ago because I was very concerned about the company and the stock.There is no way that I could hold on to this risky stock. Apparently, I sold the stock at the right time. I sold on May 1. I am absolutely certain that I made the right decision.
Sentiment: Strong Sell
You can get a high yield for a high risk. If the price of the stock drops (which is likely) then
your return on investment will be well below 8.5%.
Sentiment: Strong Sell
I have not dug into this yet but at first blush.......The two things I see are that FOX was spun off and no longer counts in the cash flow numbers. The only ding looks like a US military contract for camelback (low margin - high volume) that was completed last year. This reduced sales but not earnings. Now I realize they "missed earnings" but they actually only missed what the analysts projected and not what management projected. Given that they seem to be under control, I'm okay with a company that is "stagnant" at an 8.5% dividend yield. Especially when that same company has cash, borrowing capacity and no significant debt repayment requirements until 2017. But like I said, this is only a cursory look
Where are the additional expenses being absorbed? Is this a continuing concern? Are margins too low? Did they take any 1 time write downs? Does anyone on this board know this company well? I can't seem be able to research any of this information. I am not familiar enough with diversified companies to look into the financials deep enough.
Listen to yourself, SELL BECAUSE THE STOCK IS DOWN 5%....typical rookie.
I know lots of companies who own only 1 company... and make lots of money. So owning only 8 companies is a ridiculous reason to sell. Maybe selling is the correct "prediction" but you clearly have no idea why other than the fact that you are looking for a better buy in point.
Care to elaborate? Why will it drop further? I'm not doubting you, I just hate uneducated guesses. Do you have a substantial thought behind your prediction Nostradamus?