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Compass Diversified Holdings Message Board

  • musketeernumberone musketeernumberone Aug 11, 2008 9:08 AM Flag

    Other than the divi, what is the


    compelling reason to own this stock? Where is the growth supposed to come from?

    A money manager, since fired, put me into CODI. I have paper losses and never understood the rationale for buying a minor (to be generous) conglomerate. What is the point?

    Should I buy, sell or hold?

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    • Catalist for change is the reason to own CODI. 3 or 4 seemingly simple changes within the aquired companies can result in large payoffs.
      1. include management in ownership
      2. refine information technologies
      3. new uses for products
      4. new lines to existing management platforms.

      that will increase growth rate and expand value of company based on EBITDA multiple expansion.

      Mid market best value based on risk/reward

    • IMO:

      1. NEVER believe anything you read on any of these message boards (including this post).
      2. Apply equal skepticism to anything that someone who is paid a commission, tells you.
      3. CODI is more akin to a growth and income stock. Good dividend. Favorable tax treatment on most of the dividends. Growing NAV from business sales.
      4. CODI invests in businesses, ramps them up, then sells them at a profit (as evidenced by this quarter's financials). Dividends should normally come from operations, and cap gains from the sale of businesses.
      5. Two or three of the businesses are likely to do poorly in this economy, but if I recall correctly, Massoud has stated a 5-7 year time frame for turning businesses around.

      So, as long as cash flow sustains dividend growth, and so long as CODI keeps buying businesses, turning them around and selling them at a profit, we should see both dividend growth and NAV growth.

      I'm sure other readers have different opinions.

    • Buy, Buy, Buy. Insiders keep buying, dividend going up over 30%, I dont know the rational, but looks good to make some money over the short term.

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