Household Furniture
Compass Diversified is a private equity firm specializing in add on acquisitions, buyouts, industry consolidation, recapitalization, late stage and middle market investments. It seeks to invest in niche industrial or branded consumer companies, manufacturing, distribution, consumer products, business services sector, safety & security, electronic components, food, foodservice. The firm prefers to invest in companies based in North America. It seeks to invest between $100 million and $800 million in companies with an EBITDA between $15 million to $80 million. It seeks to acquire controlling ownership interests in its portfolio companies and can make additional platform acquisitions. The firm prefer to have majority stake in companies. The firm invests through its balance sheet and typically holds investments between five to seven years. Compass Diversified was founded in 2006 and is based in Westport, Connecticut with an additional office in Costa Mesa, California.
Sector
Discounted Cash Flow Valuation of Compass Diversified Holdings
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $605K | $491.7K | $399.6K | $324.8K | $264K | $214.5K | $174.4K | $141.7K | $115.2K | $93.6K | $76.08K | $760.8K |
DCF | $427.6K | $302.2K | $213.6K | $150.9K | $106.7K | $75.38K | $53.27K | $37.65K | $26.61K | $18.8K | $188K | |
Value | $1.601M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 20% | 3.2% | -1.1% | -0.34% | 21% | 1.5% | 6.2% | 1.6% | 12% | 6.8% |
ROA | 2.9% | 4.9% | 1.5% | 2.9% | 3.2% | 3.6% | 4.4% | 4.6% | 2.4% | 2.1% |
ROE | 17% | 3.5% | -1.5% | -0.62% | 26% | 1.9% | 8.9% | 2.7% | 16% | 9.3% |
The average Net Margin over the past 5 years is +6.95%.
The trend of Net Margin over the past 5 years is +0.25%.
The average ROA over the past 5 years is +3.52%.
The trend of ROA over the past 5 years is +0.06%.
The average ROE over the past 5 years is +9.16%.
The trend of ROE over the past 5 years is +0.62%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 4.76 | 6.53 | 16.10 | 17.29 | 6.60 | 7.63 | 13.64 | -20.09 | 76.00 | 2873.55 |
Debt Equity | 0.37 | 0.64 | 0.64 | 1.21 | 0.34 | 0.74 | 1.00 | 1.37 | 1.12 | 1.16 |
MIN | ||||||||||
Graham Stability | - | - | -9% | -11% | 100% | 24% | 100% | 25% | 100% | -11% |
The Debt/FCF trailing twelve month is 2873.55.
The trend of Debt/FCF over the past 5 years is 6.27.
Graham’s Stability measure stands at -0.11.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | 11% | 4% | 9.7% | -9.1% | -0.27% |
Net Income | 35% | - | 120% | 580% | 54% |
Stockholders Equity | 7.9% | 11% | 7.6% | 12% | 0.56% |
FCF | -18% | -19% | -43% | - | 2.1% |
The Revenue CAGR over the past 5 years is +4.01%.
The trend of Revenue growth rate over the past 5 years is -0.27%.
The Earnings CAGR over the past 5 years is -.
The trend of Earnings growth rate over the past 5 years is +54.18%.
The Equity CAGR over the past 5 years is +10.57%.
The trend of Equity growth rate over the past 5 years is +0.56%.
The FCF CAGR over the past 5 years is -19.04%.
The trend of FCF growth rate over the past 5 years is +2.13%.