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Compass Diversified Holdings Message Board

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  • Talking about smoking itsy. When your 60 you'll find out. I did.

  • aaaaaaaabbbbb@rocketmail.com aaaaaaaabbbbb Jul 28, 2015 12:35 AM Flag

    tell that to GWPH 2 year chart... hemp is worth more money with CODI im betting. only a matter of time before the money hits

  • You haven't heard, toking is bad for you.

  • Reply to

    CamelBac

    by bamajoe20715 Jul 27, 2015 9:40 AM

    yep. CODI management seems pretty clutch to me.

  • Reply to

    CamelBac

    by bamajoe20715 Jul 27, 2015 9:40 AM

    very quick math is they are selling it for 14x EBITDA or so - for a company that only trades at 7-8x EBITDA that seems like a lot

  • CODI selling CamelBac and realizing nice gain on the transaction.

  • aaaaaaaabbbbb@rocketmail.com aaaaaaaabbbbb Jul 22, 2015 2:15 PM Flag

    *marijuana related

  • Reply to

    Recent platform acquisition and investor day

    by ca7777111 Jun 18, 2015 3:17 PM

    Thanks. Recent investor. Management seems to know what they're doing.

  • Really happy overall with their new Hemp based food acquisition and the information released for investor day. Listening to their comments and how they think about their business really goes a long way towards justifying my ownership.

  • Richard,
    I know your not looking at getting in on CODI at these levels but seeking alpha just put out an article with an incredible wealth of information related to how CODI operates (as we have been going back and forth).

    http://seekingalpha.com/article/3198356-compass-diversified-8_5-percent-dividend-yield-10-percentminus-20-percent-undervalued?app=1&auth_param=vevt:1aloqlf:fe3511766f3214677405fc395a552bd2&uprof=44

  • Reply to

    Read the Earnings Call Transcript People!

    by financefitz May 7, 2015 3:18 PM

    "...rest is just noise". No fat on those bones, ca. Good one.

  • Hi Richard, goodwill is meaingingless for a company whose business model is in acquiring businesses which are unregulated. Goodwill is meaningful number for regulated businesses, but not for a PE-type investment. They are buying businesses that were started by the founders, usually. If you start a business and it's successful you should be able to sell it for many multiples of your supposed book value.

  • Richard,
    Fair enough and best of luck.

  • The distribution after tax will give you a decent return. Investors just have to expect no growth in the equity.
    Nothing wrong with a 7% return after tax as long as the equity does not start to decline in value. I perceived that they needed a nice sale each year to demonstrate that they can grow the equity value. Remember, the insiders not only get the distribution, they get salaries and options and other benefits.

    I think the pipelines and tanker fleets that move oil around the world offer more cash distributions and equity appreciation potential each year. So, I am going to pass at this time. Now, if the stock market corrects in the next year and equities drop 10-15%, I will take another look.
    regards,
    R.

  • Im curious how you include Clean Earth and Sterno results in the picture and compare them to 3 years ago when CODI had no influence on them. Not to mention integration challenges that often arise when companies are acquired. Agree on Tridien.

    Ergo: your facts are incorrect. they had 64million in revenue with 16.1million in EBITDA compared with the recent quarter that saw 20.7 million in revenue and 6.6 in EBITDA. ERGO is a winner that they have grown pretty well.

    Camelpak, agree with you that quarterly results and progress has not been achieved that well over the time frame covered. That is why they diversify and that is why they have their business model set up to prevent forceful selling of their companies.

    What you didnt mention, is some of the companies that have made great progress, ERGO being the first. AFM is also delivering spectacular results as a result of CODI finding new management for that company, run rate of 160million in revenue this year vs 91.5million in 2012. Advanced circuits, stable revenue and EBITDA. Liberty safe, stable to slightly improved results. Arnold, stable to slight negative results.

    The fact of the matter is that most of your return with this company is reflected in the distribution and you probably will not see this thing compound at the same rate that companies who reinvest internally will. It doesnt sound like this company is your cup of tea and that is fine. The reason i view this company as so attractive; management has a substantial stake in the partnership, a long term outlook with unique and clearly articulated strategy, and three the distribution gives me a capital allocation option that i could not get with higher growth companies. Anywho best of luck.

  • The companies I zeroed in on actually have a 2-3 year history without improvement so I assumed 2015 was not going to be a turnaround for all of them. So, yes they are speculation not misleading as most companies do not reverse 2-3-4 years of side-ways or decline. I am in the process of being taken out of 3,000 shares of Direct TV (DTV) which is being acquired by AT&T. I held on to that company for a decade as I watched yearly results improve year after year after year. My investments where a company has flat or no growth results for 2-3-4 years do not tend to reverse that. My CHK holding of 10k shares has gone nowhere year after year after year. When management improves the operations every year and revenues and earnings improve every year, that is a recipe for a winner. Look, you say I am misleading readers, that may or may not be true but we only need to wait another 2-3 quarters and my judgment will either be right or wrong, that is what makes for good investment results.

  • Richard , Did you listen to the conference call? Why do you think that first quarter results will be the same for the next 3 quarters. There is a great deal of seasonality to the results of some of these companies.To take the first quarter results and conclude the results will be no better in each of the other quarters is baseless speculation,Moreover,it is contrary to the expectations of management. The picture you are trying to paint is based on misleading and speculative assumptions.

  • Ca7/11,

    Yes you can write off Goodwill over 15 years. It does provide some shelter on the distributions to the investors. But that big number on the balance sheet as it is deducted on taxes each year is not bringing in any revenue. It does bring in some tax savings to the extent their are some taxes being paid. Perhaps the effective tax rate is 15%-20% to the extent they report taxable income, then they save that percentage. The other 80% of the deduction is in essence wasted.

    Now, individual investment performance where I said there is little to show over the last 3 years:
    Triedien had $6.4 million of EBITDA in 2012, first quarter is only $.9M, so $3.6 million annualized. Significant decline which results in significant decline in the value purchased.
    Look at Camelback, they paid $250 million for this company, a monster holding for them. EBITDA was $40 million back in 2012, first quarter 2015 is $7.5 million which is $30 million annualized, a 25% decline in earnings, so what does that do to the $250 million purchase price when earnings are hit 25%. In a good company the earnings grow each year from 2012-2013-2014-2015, note here.
    Ergobaby had $64 million of EBITDA in 2012, first quarter of 2015 is $16 million so no growth here in 4 years. Get the picture I am painting?
    Clean Earth, EBITDA was $26 million in 2012, first quarter of 2015 is $5 million, so that is $20 million on an annual basis which is a 25% decline which reflects a decline in the value of what they purchased.
    Sterno's revenue in 2013 was $134 million, in the first quarter of 2015 it is $28 million which works out $112 million in annual revenue, a decline in revenue of $22 million.
    These five companies are showing about a 20% decline in value the way I see it, yet the value is carried at the purchase price on the balance sheet. If you assume very little or no value in the Goodwill and intangibles and a decline in the value of these 5 companies, then there is really no equity for investors

  • Richard,
    Dont intangible assets through the amortization process in effect provide a sort of tax shelter? I get that there is no realized cash flow from these assets but would argue that there is a tangible benefit in the intangible assets being amortized over their useful life.

    Regards performance; looking at their recent presentation as of 8May2015. Slide 9 breaks down their branded consumer businesses (camelbak, Ergo, Liberty) shows an annual decrease in revenue of 3.8% and Adj EBITDA drop of 12.3%. Now if you exclude Liberty safe results (necessary because its a cyclical industry and 2014 was a high point in sales), you get positive year over year Revenue of 11% and EBITDA of 13%. Similar results can be observed in their pro forma figures for their Niche industrial businesses on slide 10. The bottom line is that they have numerous platform companies for the same reasons that investors diversify, more stable performance on a consolidated basis. That being said Tridien has been an anchor on their performance for years, no way of arguing against that. What are the other problem companies you have identified in your 1/3?

    As to the debt concern, part of CODI's business and way of obtaining cash flow is through parent level debt for their subsidiaries. This is an important part/method they use to get cash flow from their subsidiaries.

    You do make one assumption that i find curious, which is that you they are automatically looking for a buyer of these under performing company. Part of their philosophy and reason they have structured their company like this is to ensure that there would be no forced sale of their businesses until they think their is opportunity for value creation. Thanks for the thoughtful discussion so far.

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