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Why Compass Diversified (CODI) is Such a Great Value Stock Pick Right Now

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Zacks Equity Research
·2 min read
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Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks, and decent dividends?

Fortunately for investors looking for this combination, we have identified a strong candidate which may be an impressive value; Compass Diversified CODI.

Compass Diversified in Focus

CODI may be an interesting play thanks to its forward PE of 15.8, its P/S ratio of 0.8, and its decent dividend yield of 8.2%. These factors suggest that Compass Diversified is a pretty good value pick, as investors have to pay a relatively low level for each dollar of earnings, and that CODI has decent revenue metrics to back up its earnings.

Compass Diversified Holdings PE Ratio (TTM)

Compass Diversified Holdings PE Ratio (TTM)
Compass Diversified Holdings PE Ratio (TTM)

Compass Diversified Holdings pe-ratio-ttm | Compass Diversified Holdings Quote

But before you think that Compass Diversified is just a pure value play, it is important to note that it has been seeing solid activity on the earnings estimate front as well. For current year earnings, the consensus has gone up by 20.7% in the past 60 days, thanks to five upward revisions in the past two months compared to none lower.

This estimate strength is actually enough to push CODI to a Zacks Rank #1 (Strong Buy), suggesting it is poised to outperform. You can see the complete list of today’s Zacks #1 Rank stocks here.

So really, Compass Diversified is looking great from a number of angles thanks to its PE below 20, a P/S ratio below one, and a strong Zacks Rank, meaning that this company could be a great choice for value investors at this time.

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Zacks Investment Research