Compass Diversified (CODI) - Stock Analysis
Last updated: Apr 5, 2026
Research Idea
Research content for general circulation. Not individualized advice. Methodology & Disclosures
An activist campaign calling for liquidation with a stated $26/share value and a $292.5M Sterno sale announcement are strong event catalysts that have already driven a ~49% 21âday rally; with the stock still near $9â10 and ~40% above its 21âday SMA, continued headlineâdriven reârating and momentum over the next several sessions is likely, albeit with elevated volatility.
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AI Analyst Overview
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Valuation Metrics
Fundamental Analysis
Key Financial Insights: ⢠High gross margin ⢠Heavy leverage ⢠Negative net income CODI generates strong gross profit and operating cash in quarters but is hamstrung by heavy nonâoperating losses, very high leverage, large intangibles, and uneven freeâcash conversion that produce substantial net losses and solvency risk.
Price Behavior
Key Price Behavior Insights: ⢠Strong breakout ⢠Momentum extended ⢠Elevated volatility Support Level: $6.00â$6.40 Resistance Level: $8.20â$8.60 Strong short-term uptrend with a ~25% rise over the last month and price ~30% above the short-term mean, signaling momentum but elevated pullback risk.
Sentiment & News
Key News Insights: ⢠Sterno divestiture ⢠Preferred distributions ⢠Industrial expansion CODI agreed to sell Sterno's foodâservice business for $292.5M to accelerate deleveraging, declared preferred dividends, received a consensus Hold/$11.50 analyst view, and saw subsidiary Arnold expand U.S. rareâearth magnet supplyâsignaling portfolio reshaping and balanceâsheet focus.
AI Summary
CODI is no longer a steady yield conglomerate but a levered remediation storyâits investment case now hinges on executing staged asset sales and hitting the guided subsidiary EBITDA range to materially cut net debt and cure covenant risk. Treat the stock as event-driven: buy only after verified deal proceeds materially reduce leverage or covenants are remediated; absent those catalysts, downside from impaired intangibles or distressed sales is the primary risk.
Description
Compass Diversified is a private equity firm that acquires controlling stakes in middle-market companies across industrial, consumer-branded and business services sectors, including manufacturing, distribution, food and specialty components. The firm deploys $100 million to $800 million per transaction into North American companies with EBITDA typically between $15 million and $80 million, using its balance sheet and often pursuing additional platform add-on acquisitions. Founded in 2005, Compass Diversified is based in Westport, Connecticut, with an additional office in Costa Mesa, California, and generally holds investments for five to seven years.
Idea History
| Date | Close | Ticker | Company | Summary | Status | P/L |
|---|---|---|---|---|---|---|
| Apr 8 | Apr 15 | CODI | Compass Diversified | An activist campaign calling for liquidation with a stated $26/share value and a $292.5M Sterno sale announcement are strong event catalysts that have already driven a ~49% 21âday rally; with the stock still near $9â10 and ~40% above its 21âday SMA, continued headlineâdriven reârating and momentum over the next several sessions is likely, albeit with elevated volatility. | Active | +0.0% |