High-Dividend Stock Under Heavy Accumulation

by Sam Collins | July 18, 2012 1:31 am

Compass Diversified Holdings (NYSE:CODI[1]) — This business development company acquires controlling interests in and manages small-cap businesses. Analysts look for earnings of $1.48 this year and $1.62 in 2013.

It pays a dividend of $1.44 for a current yield of 10%. A Q2 distribution of 36 cents was declared on July 10. Analysts estimate that the net asset value (NAV) of CODI is $17.04.

Technically the stock is trading in the upper portion of its trading pattern, which is a right triangle with support at $12.50 and resistance at $14.80. The stock has been under heavy accumulation, and the 20-day moving average crossing up and through the 50-day and 200-day moving averages is a short-term buy signal.

The high dividend supports buying a half position now and a full position on a pullback to $13.40 or a breakout through $15. The trading target for CODI is $18.

Source URL: https://investorplace.com/2012/07/trade-of-the-day-compass-diversified-holdings-nyse-codi/

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