Compass Diversified (NYSE:CODI) Shares Gap Up on Insider Buying Activity

Compass Diversified Holdings (NYSE:CODI) shares gapped up prior to trading on Friday following insider buying activity. The stock had previously closed at $12.28, but opened at $13.00. Compass Diversified shares last traded at $12.81, with a volume of 131,535 shares.

Specifically, insider Zachary T. Sawtelle purchased 7,000 shares of the firm’s stock in a transaction on Thursday, August 13th. The stock was bought at an average cost of $12.45 per share, with a total value of $87,150.00. Following the completion of the acquisition, the insider owned 63,588 shares of the company’s stock, valued at $791,670.60. The trade was a 12.37% increase in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, insider Zachary T. Sawtelle acquired 25,000 shares of the stock in a transaction on Wednesday, August 12th. The stock was bought at an average price of $11.99 per share, for a total transaction of $299,750.00. Following the transaction, the insider owned 56,588 shares in the company, valued at approximately $678,490.12. This represents a 79.14% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In other news, insider Stephen Keller bought 10,000 shares of the business’s stock in a transaction dated Wednesday, August 12th. The stock was purchased at an average cost of $12.01 per share, with a total value of $120,100.00. Following the acquisition, the insider directly owned 51,840 shares in the company, valued at $622,598.40. This trade represents a 23.90% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which is accessible through this hyperlink.

Analyst Ratings Changes

Several research firms recently issued reports on CODI. TD Cowen increased their price target on shares of Compass Diversified from $12.50 to $18.00 and gave the stock a “buy” rating in a report on Tuesday. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Compass Diversified in a report on Friday, July 17th. B. Riley Financial raised shares of Compass Diversified from a “neutral” rating to a “buy” rating and increased their target price for the stock from $11.00 to $15.00 in a research note on Tuesday. Finally, UBS Group set a $18.00 target price on Compass Diversified in a research note on Tuesday. Three equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, Compass Diversified has an average rating of “Hold” and a consensus target price of $16.50.

Key Headlines Impacting Compass Diversified

Here are the key news stories impacting Compass Diversified this week:

• Positive Sentiment: Analyst upgrades and higher targets: B. Riley Financial upgraded CODI to “Buy” from “Neutral” and raised its price target to $15 from $11. TD Cowen increased its target to $18 from $12.50, while UBS established an $18 target. The higher targets suggest analysts see additional upside from recent levels. B. Riley Financial upgrades Compass Diversified
• Positive Sentiment: Strong insider buying: Zachary T. Sawtelle purchased 25,000 shares for approximately $299,750 on August 12 and another 7,000 shares for $87,150 on August 13. Stephen Keller also bought 10,000 shares for roughly $120,100. The purchases materially increased their holdings and may signal confidence that CODI is undervalued or positioned for a recovery. SEC insider ownership filing
• Positive Sentiment: Turnaround potential: A renegotiated management-fee agreement is expected to reduce costs, strengthening the value-oriented recovery thesis. The company’s recent $292 million sale has also drawn investor attention. Compass Diversified small-cap comeback analysis
• Neutral Sentiment: Unusual options activity: Elevated options trading indicates increased interest in CODI and could amplify near-term volatility, but it does not clearly establish whether traders expect further gains or a pullback. Unusual options activity in Compass Diversified
• Negative Sentiment: Losses and execution risks: CODI reported a quarterly loss of $0.09 per share, a negative net margin and negative return on equity. Fraud at one portfolio investment and the company’s elevated debt-to-equity ratio could limit the recovery and increase downside risk.

Compass Diversified Stock Up 4.2%

The business has a fifty day simple moving average of $10.44 and a 200 day simple moving average of $9.41. The firm has a market cap of $962.32 million, a price-to-earnings ratio of -5.89 and a beta of 1.27. The company has a debt-to-equity ratio of 34.60, a current ratio of 2.67 and a quick ratio of 1.56.

Compass Diversified (NYSE:CODI) last issued its quarterly earnings results on Monday, August 10th. The financial services provider reported ($0.09) earnings per share (EPS) for the quarter. Compass Diversified had a negative return on equity of 9.53% and a negative net margin of 5.38%.The firm had revenue of $424.04 million during the quarter. As a group, equities analysts forecast that Compass Diversified Holdings will post 0.22 EPS for the current fiscal year.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Jacobs Levy Equity Management Inc. grew its holdings in shares of Compass Diversified by 75.2% during the fourth quarter. Jacobs Levy Equity Management Inc. now owns 1,966,408 shares of the financial services provider’s stock worth $9,439,000 after buying an additional 843,965 shares in the last quarter. SG Capital Management LLC purchased a new stake in Compass Diversified during the 4th quarter valued at about $7,626,000. CenterBook Partners LP acquired a new stake in Compass Diversified in the 4th quarter valued at about $6,597,000. Bank of America Corp DE lifted its stake in Compass Diversified by 77.4% in the 1st quarter. Bank of America Corp DE now owns 1,306,527 shares of the financial services provider’s stock worth $10,269,000 after purchasing an additional 570,003 shares in the last quarter. Finally, State Street Corp lifted its stake in Compass Diversified by 2.3% in the 4th quarter. State Street Corp now owns 1,238,792 shares of the financial services provider’s stock worth $5,946,000 after purchasing an additional 27,774 shares in the last quarter. Hedge funds and other institutional investors own 72.73% of the company’s stock.

Compass Diversified Company Profile

Compass Diversified Holdings (NYSE:CODI) is a publicly traded private equity company headquartered in Bethesda, Maryland. The firm specializes in acquiring and managing middle-market businesses across a variety of industries, with a focus on driving operational performance and sustainable growth. As an externally managed entity, Compass Diversified leverages a disciplined investment approach to build a portfolio of market-leading companies that benefit from strategic oversight, capital support and shared best practices.

Compass Diversified’s investment activities span five core sectors: branded consumer, consumer services, differentiated industrial products, value-added distribution and business services.