Bargain Hunters Take Note: Insider Cluster-Buying At CODI

A particularly strong insider buying signal is what we call a "cluster-buy" where three or more different insiders make open market purchases within a short period of one another. At Compass Diversified Holdings (Symbol: CODI), 6 different insiders purchased 24,162 shares at an average price of $25.58/share, for a total of $618,088, with the most recent purchase on January 3, 2020.

Presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money. So when multiple insiders all decide to make purchases around the same time, it could be a strong indication that the stock is undervalued. Below is a table summarizing the insider buys that make up this "cluster":

Purchased Insider Title Shares Price/Share Value
01/03/2020 James Bottiglieri 3,897 $25.58 $99,698.51
01/03/2020 Larry L. Enterline 3,897 $25.58 $99,692.27
01/03/2020 C. Sean Day 4,677 $25.58 $119,643.27
01/03/2020 Harold S. Edwards 3,897 $25.58 $99,682.53
01/03/2020 D. Eugene Ewing 3,897 $25.58 $99,684.48
01/03/2020 Sarah Gaines McCoy 3,897 $25.58 $99,686.43

The chart below shows the one year performance of CODI shares, versus its 200 day moving average. Note that CODI's low point in its 52 week range is $13.75 per share, with $26.37 as the 52 week high point — that compares with a last trade of $25.01, with shares currently trading up about 0.6% on the day.

Compass Diversified Holdings Chart

The current annualized dividend paid by Compass Diversified Holdings is $1.44/share, currently paid in quarterly installments, and its most recent dividend has an upcoming ex-date of 01/15/2020. Below is a long-term dividend history chart for CODI, which can be of good help in judging whether the most recent dividend with approx. 5.8% annualized yield is likely to continue.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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