Business Development Companies (BDC's) have gotten quite a bit more
attention in recent years, due at least in part to the exposure they
offer to smaller companies and the potential for outsized distributions.
While Compass Diversified Holdings (CODI)
isn't a BDC, it's structured as a trust designed to acquire and manage
controlling stakes in private companies, it seems "close enough for
jazz" to many investors and analysts and the shares have done well
lately.
I do believe this is an interesting company. Although
valuation is higher than I'd like, I don't see a lot of risk in the
company's portfolio, and I believe management's price and value
discipline can serve companies well over the long term. Accounting rules
make conventional valuation more challenging, and investors should take
careful notice of the company's legal structure as a trust, but this is
a name worth due diligence today and a spot on investor watchlists.
Follow this link to continue:
Compass Diversified Holdings Looks To Build Value The Old-Fashioned Way
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