Compass Diversified (NYSE:CODI) Downgraded by Wall Street Zen to "Sell"

Key Points

• Wall Street Zen downgraded Compass Diversified to “Sell” from “Hold,” although the broader analyst consensus remains “Hold” with an average price target of $16.50.
• Other analysts were more optimistic: B. Riley upgraded the stock to “Buy” with a $15 target, while TD Cowen and UBS set targets of $18.
• CODI shares recently traded at $12.70, while the company reported a quarterly loss of $0.09 per share. Insiders have made substantial purchases, including more than $1.4 million of stock over the past 90 days.

Compass Diversified (NYSE:CODI - Get Free Report) was downgraded by equities researchers at Wall Street Zen from a "hold" rating to a "sell" rating in a research note issued on Saturday.

Several other analysts also recently commented on the stock. UBS Group set a $18.00 price objective on shares of Compass Diversified in a report on Tuesday. B. Riley Financial raised shares of Compass Diversified from a "neutral" rating to a "buy" rating and raised their target price for the stock from $11.00 to $15.00 in a report on Tuesday. TD Cowen boosted their target price on shares of Compass Diversified from $12.50 to $18.00 and gave the company a "buy" rating in a research report on Tuesday. Finally, Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Compass Diversified in a report on Friday, July 17th. Three investment 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, the company currently has an average rating of "Hold" and a consensus price target of $16.50.

Compass Diversified Trading Up 3.4%

Compass Diversified stock opened at $12.70 on Friday. The company has a quick ratio of 1.56, a current ratio of 2.26 and a debt-to-equity ratio of 11.90. Compass Diversified has a 52 week low of $4.58 and a 52 week high of $13.25. The company has a market capitalization of $955.35 million, a price-to-earnings ratio of -5.85 and a beta of 1.27. The stock has a 50-day moving average price of $10.48 and a 200 day moving average price of $9.43.

Compass Diversified (NYSE:CODI - Get Free Report) last issued its earnings results on Monday, August 10th. The financial services provider reported ($0.09) EPS for the quarter. Compass Diversified had a negative net margin of 5.38% and a negative return on equity of 10.36%. The firm had revenue of $424.04 million during the quarter. Sell-side analysts anticipate that Compass Diversified will post 0.22 EPS for the current year.

Insider Activity

In other news, insider Stephen Keller purchased 10,000 shares of the stock in a transaction that occurred on Wednesday, August 12th. The shares were purchased at an average cost of $12.01 per share, with a total value of $120,100.00. Following the completion of the acquisition, the insider owned 51,840 shares of the company's stock, valued at approximately $622,598.40. This represents a 23.90% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Zachary T. Sawtelle purchased 25,000 shares of the stock in a transaction that occurred on Wednesday, August 12th. The shares were purchased at an average cost of $11.99 per share, for a total transaction of $299,750.00. Following the completion of the acquisition, the insider directly owned 56,588 shares of the company's stock, valued at $678,490.12. This represents a 79.14% increase in their position. The SEC filing for this purchase provides additional information. In the last 90 days, insiders have bought 120,995 shares of company stock valued at $1,486,098. 1.60% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Compass Diversified

A number of institutional investors have recently modified their holdings of CODI. Essential Partners LLC increased its stake in shares of Compass Diversified by 9,263.2% in the 1st quarter. Essential Partners LLC now owns 5,337 shares of the financial services provider's stock valued at $42,000 after purchasing an additional 5,280 shares in the last quarter. RPO LLC purchased a new position in Compass Diversified during the fourth quarter worth approximately $60,000. Geneos Wealth Management Inc. grew its holdings in Compass Diversified by 68.6% in the second quarter. Geneos Wealth Management Inc. now owns 9,830 shares of the financial services provider's stock valued at $62,000 after purchasing an additional 4,000 shares during the period. Focus Partners Wealth acquired a new stake in Compass Diversified in the third quarter valued at approximately $70,000. Finally, Quantessence Capital LLC purchased a new stake in shares of Compass Diversified in the third quarter valued at approximately $70,000. 72.73% of the stock is currently owned by institutional investors and hedge funds.

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 from “Neutral” to “Buy” and raised its price target from $11 to $15. TD Cowen increased its target from $12.50 to $18 and maintained a “Buy” rating, while UBS also set an $18 target. The higher targets are above recent trading levels and likely improved investor sentiment. B. Riley Financial upgrades Compass Diversified
• Positive Sentiment: Multiple insider purchases: Zachary T. Sawtelle bought 25,000 shares for approximately $299,750 on August 12 and another 7,000 shares for $87,150 on August 13. Stephen Keller purchased 10,000 shares for about $120,100. The transactions materially increased their ownership and may signal that insiders believe CODI is undervalued or expect a business recovery. SEC insider ownership filing
• Positive Sentiment: Turnaround and transaction optimism: Reports have highlighted a $292 million sale and potential management-fee savings, reinforcing the possibility of improved liquidity, lower expenses and stronger portfolio performance. Compass Diversified’s $292 million sale
• Neutral Sentiment: Unusual options activity: Elevated options volume shows increased attention around CODI and could amplify near-term volatility, but it does not establish a clear bullish or bearish direction. Unusual options trading in Compass Diversified
• Negative Sentiment: Losses remain a risk: CODI reported a quarterly loss of $0.09 per share, negative net margin and negative return on equity. Its recovery case therefore depends on successfully improving portfolio-company performance and converting recent strategic developments into sustained earnings.

About Compass Diversified

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.

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