Compass Diversified Holdings (NYSE:CODI) — This specialty finance company is a value and long-term oriented acquirer and manager of small- and mid-market businesses that are headquartered in the United States. CODI has strong positions in niche markets, and has positive, stable and growing cash flows.
The company passes a portion of the cash flows of the acquired businesses, net of expenses, directly to shareholders in the form of dividends. The estimated net asset value (NAV) is $16.45, according to BB&T Capital Markets. CODI declared a Q3 dividend of $0.36 per share, which if annualized, provides a dividend yield of 10%. CODI plans to announce Q3 earnings on Nov. 7, after the close.
Technically, CODI broke from a bullish reverse head-and-shoulders formation when it drove through a neckline at $15 and jumped to $15.70. Often breakouts are followed by quick reversals that result from profit-taking and give buyers a second chance at a solid value. Buy CODI at $14.20 for a six-month trade while collecting the dividend.