Is Compass Diversified Holdings (CODI) Going to Burn These Hedge Funds?

Seeing as Compass Diversified Holdings (NYSE:CODI) has encountered a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their full holdings heading into Q4. It’s worth mentioning that Matthew Hulsizer’s PEAK6 Capital Management dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $0.5 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $0.2 million worth of CODI shares.

Let’s check out hedge fund activity in other stocks similar to Compass Diversified Holdings (NYSE:CODI). These stocks are Maiden Holdings, Ltd. (NASDAQ:MHLD), Zhaopin Ltd (ADR) (NYSE:ZPIN), Finish Line Inc (NASDAQ:FINL), and Chesapeake Utilities Corporation (NYSE:CPK). This group of stocks’ market caps resemble CODI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MHLD 13 41771 3
ZPIN 4 8590 -2
FINL 21 29157 0
CPK 10 43970 -2

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $8 million in CODI’s case. Finish Line Inc (NASDAQ:FINL) is the most popular stock in this table. On the other hand Zhaopin Ltd (ADR) (NYSE:ZPIN) is the least popular one with only 4 bullish hedge fund positions. Compass Diversified Holdings (NYSE:CODI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FINL might be a better candidate to consider taking a long position in.

Disclosure: none.