In a recent transaction, significant shareholders of Compass Diversified Holdings (NYSE:CODI) have sold a considerable number of shares. CGI Magyar Holdings LLC, Stevns Trust, and Path Spirit LTD, all entities owning more than ten percent of the company's shares, offloaded a combined total of 130,319 shares. The sales occurred on July 11 and July 12, 2024, fetching a price range between $22.5451 and $22.7774 per share, amounting to a total sale value of over $2.9 million.
The first transaction, dated July 11, saw the sale of 100,000 shares at a price of $22.5451 each, while the second transaction on July 12 involved 30,319 shares sold at $22.7774 per share. Following these transactions, the shareholders' remaining stakes in Compass Diversified Holdings have decreased, but they still hold a significant number of shares, with the post-transaction amounts indicating millions of shares still under their ownership.
Compass Diversified Holdings, known for its diverse portfolio including household furniture manufacturing among other industries, has seen these major stakeholders adjust their positions, which could be of interest to investors monitoring insider activity.
The details of the transactions were outlined in a Form 4 filing with the Securities and Exchange Commission. It is worth noting that CGI Magyar Holdings LLC is owned primarily by Stevns Trust, a charitable entity, with a minor share held by Anholt Services (USA), Inc. Furthermore, the ownership structure involves several layers of trustees and companies, with Path Spirit Limited acting as the trust protector for Stevns Trust.
Investors often look to such filings for insights into insider sentiment, and while the reasons for the sale are not disclosed in the filing, the disclosed transactions provide a transparent view of the trading activities of Compass Diversified Holdings' major shareholders.
In other recent news, Compass Diversified Holdings (CODI) reported strong financial results for the first quarter of 2024, with an 8% increase in consolidated revenue to $524.3 million and a 28% rise in adjusted EBITDA to $94.8 million, surpassing analyst expectations. Growth was primarily driven by the company's branded consumer sector, including subsidiaries such as Lugano Diamonds, BOA, and The Honey Pot Company. Despite a slight dip in the industrial vertical's revenue and adjusted EBITDA, Compass Diversified raised its full-year adjusted earnings forecast, reflecting optimism for the remainder of the year.
In line with its strategy to focus on innovative and disruptive businesses, the company divested Crosman to Daisy Outdoor Products. Additionally, Compass Diversified released its first sustainability report, underlining its commitment to environmental, social, and governance (ESG) principles. Recent developments also include management's expressed confidence in the M&A market and potential for strategic acquisitions.
On a less positive note, the company's net income for the quarter was impacted by an $8 million goodwill impairment charge at Velocity Outdoor, resulting in $5.8 million in net income. Nevertheless, the company remains hopeful for modest growth in the industrial vertical later in the year and has raised its subsidiary adjusted EBITDA guidance by $10 million for 2024.
InvestingPro Insights
Amidst the news of significant shareholder sales, Compass Diversified Holdings (NYSE:CODI) presents a mixed picture for potential investors. According to InvestingPro, net income for CODI is expected to grow this year. This anticipated profitability, after a period of not being profitable over the last twelve months, could signal a turning point for the company. Additionally, the company's stock price movements have been quite volatile, which could be a factor for traders looking for short-term opportunities or for long-term investors to consider when timing their entry points.
From a financial health perspective, Compass Diversified Holdings' liquid assets exceed its short-term obligations, suggesting a strong liquidity position. Furthermore, the company has maintained its dividend payments for 19 consecutive years, which is reflected in a current dividend yield of 4.4%, making it an attractive consideration for income-focused investors. This enduring commitment to returning value to shareholders may provide some reassurance against the backdrop of insider sales.
InvestingPro Data highlights a market capitalization of $1.74 billion USD for CODI, with a notable revenue growth rate of 5.89% over the last twelve months as of Q1 2024. The gross profit margin stands at a robust 44.43%, indicating efficiency in the company's operations. For those considering the company's valuation, the price to book ratio as of the last twelve months is 1.84, which might offer a reasonable entry point relative to the company's assets.
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