The older I get, the more I find myself in the position of Danny Glover's character Roger Murtaugh from Lethal Weapon,
famous for repeatedly saying, "I'm getting too old for this
." Although Murtaugh went ahead and did those things
anyway, I do believe there's a relevant takeaway for investing -
sometimes, a stock just isn't worth the hassle, and I'm starting to
wonder if that's the case with Compass Diversified Holdings (CODI).
While
Compass does indeed have a diverse group of businesses and has a long
track record of paying out tax-advantaged distributions, the underlying
growth of the businesses has never been all that spectacular, and the
distribution payments haven't grown since 2012. I understand the appeal
of the tax-advantaged income that Compass produces and maybe even the
skew toward smaller businesses, but considering the management fees, the
tax hassles, and the lackluster track record the portfolio companies,
I'm no longer as confident that the discount to fair value is
"unreasonable" as opposed to just being fair compensation for the
potential headaches.
Continue reading here:
Is The Value At Compass Diversified Holdings Worth The Hassle?
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