Conglomerates have always presented investors with valuation
challenges, as few companies provide the level of detail necessary to
value the components and even those that do often lack proper
benchmarks. Compass Diversified Holdings (NYSE:CODI)
adds some additional challenges and questions to the mix, including how
to value management's value creation efforts and whether to factor an
investor's tax status into the mix.
Compass is limited to some
extent as an investment candidate by a lack of coverage and the added
work that goes into getting a fair sense of the per-share value. I think
the added work is worth it, though, as I believe these shares are worth
around $20.
Read more here:
Not Simple To Value, Compass Diversified Holdings Looks Appealing Nonetheless
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