Compass Diversified Restated Q1: Too Risky To Gamble (Rating Downgrade)
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Gytis Zizys3.73K FollowersFollow5ShareSavePlay(8min)Comment(1)SummaryCompass Diversified faces severe financial distress following the Lugano fraud, with breached debt covenants and a "Going Concern" warning.CODI's restated Q1 results reveal a dramatic reduction in revenues and profitability, with EBITDA guidance slashed from $570m-$610m to $330m-$360m.Lugano's Chapter 11 filing and deconsolidation will further reduce inventories by 40% and Lugano revenues by 85%, compounding CODI's challenges.I recommend selling any remaining CODI holdings, as risk is elevated and uncertainty outweighs potential upside. Abu Hanifah/iStock via Getty Images Introduction It’s been over a year since the last time I covered Compass Diversified (CODI), and in the wake of all the drama, I wanted to look over the company’s restatedThis article was written byGytis Zizys3.73K FollowersFollowMSc in Finance. Long-term horizon investor mostly with 5-10 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.