Traders Purchase High Volume of Compass Diversified Call Options (NYSE:CODI)

Key Points

• Traders purchased an unusually large volume of call options—80,997 call contracts, roughly a 4,943% increase over the typical daily call volume—signaling heavy bullish bets on CODI.
• Compass Diversified missed on quarterly results, reporting ($0.62) EPS vs. a ($0.06) consensus and $426.86M revenue vs. $437.75M expected, while the stock trades near $12.20 with a consensus “Hold” and a $12.75 price target; market cap is about $918M and the PE is negative.
• Insider activity and ownership are notable: Stephen Keller bought 30,000 shares at $8.61, insiders own 1.6% of the stock, and institutional investors hold about 72.73%.

Compass Diversified Holdings (NYSE:CODI - Get Free Report) was the target of unusually large options trading activity on Thursday. Stock traders acquired 80,997 call options on the stock. This is an increase of approximately 4,943% compared to the typical daily volume of 1,606 call options.

Compass Diversified Stock Performance

Compass Diversified stock traded up $0.58 during midday trading on Thursday, reaching $12.20. The stock had a trading volume of 1,424,719 shares, compared to its average volume of 1,282,700. Compass Diversified has a 12 month low of $4.58 and a 12 month high of $12.64. The firm's 50-day moving average price is $8.58 and its 200 day moving average price is $6.95. The firm has a market capitalization of $917.55 million, a PE ratio of -3.14 and a beta of 1.29. The company has a quick ratio of 1.26, a current ratio of 2.42 and a debt-to-equity ratio of 19.20.

Compass Diversified (NYSE:CODI - Get Free Report) last announced its quarterly earnings data on Wednesday, May 6th. The financial services provider reported ($0.62) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.06) by ($0.56). The company had revenue of $426.86 million during the quarter, compared to analyst estimates of $437.75 million. As a group, research analysts predict that Compass Diversified will post 0.09 earnings per share for the current fiscal year.

Analysts Set New Price Targets

Several research firms recently weighed in on CODI. Zacks Research raised shares of Compass Diversified from a "strong sell" rating to a "hold" rating in a research note on Monday, March 16th. Compass Point set a $15.00 price objective on shares of Compass Diversified in a research note on Tuesday, January 27th. Raymond James Financial assumed coverage on shares of Compass Diversified in a research note on Wednesday, March 11th. They set a "hold" rating on the stock. B. Riley Financial lifted their price target on shares of Compass Diversified from $8.00 to $10.50 and gave the company a "neutral" rating in a research note on Tuesday, April 7th. Finally, Weiss Ratings raised shares of Compass Diversified from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Tuesday, April 21st. One equities research analyst has rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of "Hold" and a consensus price target of $12.75.

Insiders Place Their Bets

In other news, insider Stephen Keller acquired 30,000 shares of Compass Diversified stock in a transaction that occurred on Monday, April 6th. The shares were acquired at an average price of $8.61 per share, with a total value of $258,300.00. Following the purchase, the insider directly owned 20,000 shares of the company's stock, valued at $172,200. The trade was a -300.00% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. 1.60% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of the business. Geneos Wealth Management Inc. boosted its stake 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 worth $62,000 after buying an additional 4,000 shares in the last quarter. Focus Partners Wealth bought a new stake in shares of Compass Diversified in the 3rd quarter valued at about $70,000. Quantessence Capital LLC bought a new stake in shares of Compass Diversified in the 3rd quarter valued at about $70,000. Diversify Wealth Management LLC bought a new stake in shares of Compass Diversified in the 2nd quarter valued at about $81,000. Finally, CIBC Bancorp USA Inc. purchased a new stake in shares of Compass Diversified during the third quarter valued at approximately $81,000. Hedge funds and other institutional investors own 72.73% of the company's stock.

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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