Compass Diversified is a cheap, free-cash-flow-positive conglomerate with notable insider buying and a 38.8% gap to the analyst target, held back by below-floor quality, declining revenue, no moat and erratic earnings.
Thesis pillars
- Quality Below Floor No Moat→Stable
- Cheap Valuation With Target Upside→Stable
- Insider Buying Conviction→Stable
- +2 more pillars — see the Why tab for full reasoning
Pillars as of Oct 24, 2026, based on the 10-K filed Feb 27, 2026
D/B/A Compass Diversified Holdi (CODI) Stock Analysis
Range Bound setup · Inst Constrain edge
Industrials · Conglomerates
Sell if holding. Engine safety override at $10.77: Quality below floor (3.4 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 5.1/10 and A.R:R 3.8:1 is above the 1.5:1 BUY gate. Specifically: Below-average business quality.
Compass Diversified Holdings is a permanent-capital holding company that acquires and actively manages controlling stakes in small and middle-market branded-consumer and industrial businesses, including 5.11, BOA, PrimaLoft, The Honey Pot Co., Velocity Outdoor, Altor Solutions,... Read more
Sell if holding. Engine safety override at $10.77: Quality below floor (3.4 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 5.1/10 and A.R:R 3.8:1 is above the 1.5:1 BUY gate. Specifically: Below-average business quality. Chart setup: RSI 47 mid-range, Bollinger mid-band. Score 5.1/10, moderate confidence.
Passes 7/9 gates (positive momentum, favorable risk/reward ratio, clean insider activity, no SEC red flags, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on earnings proximity 6d<=7d. Suitability: aggressive.
About D/B/A Compass Diversified Holdi
About D/B/A Compass Diversified Holdi
Compass Diversified Holdings owns controlling stakes in eight branded-consumer and industrial businesses spanning tactical apparel (5.11), footwear closure systems (BOA), synthetic insulation (PrimaLoft), feminine care (The Honey Pot Co.), archery and hunting gear (Velocity Outdoor), molded foam packaging (Altor Solutions), engineered magnets (Arnold), and food-warming and home fragrance products (Sterno). A ninth business, luxury jeweler Lugano, filed for Chapter 11 bankruptcy in November 2025 following an internal investigation and was deconsolidated from CODI's financial statements.
CODI's manager, CGM, runs day-to-day operations under a management services agreement for a quarterly fee, and the company generally acquires businesses generating up to $100 million in annual cash flow using its own permanent capital rather than deal-contingent third-party financing, which management says lets it close acquisitions faster and with more certainty than private-equity buyers. Ownership stakes in its subsidiaries range from roughly 85% (The Honey Pot Co.) to over 99% (Altor, Velocity Outdoor) on a primary basis, with minority co-investors, often including management, holding the remainder. The Lugano Investigation forced CODI to restate financial statements for fiscal years 2022 through the first three quarters of 2025, triggered forbearance agreements and covenant amendments with its credit agreement lenders, and led the company to suspend its common share distribution after April 2025; preferred share distributions continued through 2025. The SEC, DOJ and FINRA have all examined trading or disclosure issues connected to Lugano.
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Beyond the Lugano-driven restatement and governance overhaul, CODI carries a direct financial exposure to its former subsidiary: the 10-K states plainly that the company's intercompany loan to Lugano is subject to risk of loss, since the anticipated value of the collateral securing that loan is less than the loan's outstanding value, and CODI's secured position could be challenged or subordinated within the bankruptcy proceeding. CODI also agreed to provide Lugano up to $12.0 million in debtor-in-possession financing, though Lugano ultimately determined it did not need the funds. Separately, the NYSE has flagged CODI's stock with a below-compliance indicator for missing its fiscal 2025 annual meeting, a governance lapse tied to the same investigation.
See also: Industrials · Conglomerates
From D/B/A Compass Diversified Holdi's most recent 10-K filing, extracted July 6, 2026.
Recent developments
updated 2026-10-29Recent Developments — D/B/A Compass Diversified Holdi
Latest news
- NEWS Compass Diversified Announces Third Quarter 2026 Earnings and Conference Call Information — fiscal.ai Oct 22, 2026 neutral
- NEWS Ladenburg Thalmann Initiates Coverage On Compass Diversified Hldgs with Buy Rating, Announces Price Target of $17 — benzinga Oct 13, 2026 positive
- NEWS TD Cowen Maintains Buy on Compass Diversified Hldgs, Raises Price Target to $18 — benzinga Aug 11, 2026 positive
- NEWS B. Riley Securities Upgrades Compass Diversified Hldgs to Buy, Raises Price Target to $15 — benzinga Aug 11, 2026 positive
- NEWS Compass Diversified Hldgs Q2 Adj. EPS $(0.09) Misses $0.09 Estimate, Sales $424.042M Miss $425.350M Estimate — benzinga Aug 10, 2026 negative
Generated 2026-10-29T11:48:39Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMcounterpartyLugano (bankrupt former subsidiary, intercompany loan)10-K Item 1A: 'Our intercompany loan to Lugano is subject to risk of loss.'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
2 floor-breakers
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Unprofitable operations — net margin -5.3%. Quality floor flags this regardless of sector context.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $10.77: Quality below floor (3.4 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 5.1/10 and A.R:R 3.8:1 is above the 1.5:1 BUY gate. Specifically: Below-average business quality. Chart setup: RSI 47 mid-range, Bollinger mid-band. Prior stop was $10.02. Score 5.1/10, moderate confidence.
Analyst target: $14.45 (+34.2% upside). Prior stop was $10.02. Stop-loss: $10.02.
Quality below floor (3.4 < 4.0).
D/B/A Compass Diversified Holdi trades at a P/E of N/A (forward 16.1). TrendMatrix value score: 7.3/10. Verdict: Sell.
12 analysts cover CODI with a consensus score of 4.0/5. Average price target: $17.
What does D/B/A Compass Diversified Holdi do?Compass Diversified Holdings is a permanent-capital holding company that acquires and actively manages controlling...
Compass Diversified Holdings is a permanent-capital holding company that acquires and actively manages controlling stakes in small and middle-market branded-consumer and industrial businesses, including 5.11, BOA, PrimaLoft, The Honey Pot Co., Velocity Outdoor, Altor Solutions, Arnold, and Sterno. Following an investigation into former subsidiary Lugano, which filed for Chapter 11 bankruptcy and was deconsolidated in November 2025, the company restated multiple years of financial statements, identified material weaknesses in internal controls, and suspended its common share distribution in 202