Compass Diversified (NYSE:CODI – Get Free Report) and American Bitcoin (NASDAQ:ABTC – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Compass Diversified and American Bitcoin, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Compass Diversified | 1 | 2 | 4 | 0 | 2.43 |
| American Bitcoin | 1 | 1 | 4 | 0 | 2.50 |
Compass Diversified presently has a consensus target price of $17.00, indicating a potential upside of 59.85%. American Bitcoin has a consensus target price of $28.25, indicating a potential upside of 247.05%. Given American Bitcoin’s stronger consensus rating and higher possible upside, analysts clearly believe American Bitcoin is more favorable than Compass Diversified.
Institutional and Insider Ownership
72.7% of Compass Diversified shares are held by institutional investors. Comparatively, 10.2% of American Bitcoin shares are held by institutional investors. 1.6% of Compass Diversified shares are held by insiders. Comparatively, 2.6% of American Bitcoin shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
Compass Diversified has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, American Bitcoin has a beta of 3.96, meaning that its share price is 296% more volatile than the S&P 500.
Valuation & Earnings
This table compares Compass Diversified and American Bitcoin”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Compass Diversified | $1.87 billion | 0.43 | -$226.41 million | ($2.17) | -4.90 |
| American Bitcoin | $185.16 million | 3.20 | -$153.17 million | ($3.05) | -2.67 |
American Bitcoin has lower revenue, but higher earnings than Compass Diversified. Compass Diversified is trading at a lower price-to-earnings ratio than American Bitcoin, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Compass Diversified and American Bitcoin’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Compass Diversified | -5.38% | -10.36% | -0.10% |
| American Bitcoin | -71.75% | -29.89% | -15.52% |
About Compass Diversified
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, healthcare, safety & security, electronic components, food and 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.
About American Bitcoin
Gryphon Digital Mining is an innovative venture in the bitcoin space. Gryphon Digital Mining, formerly known as Akerna Corp., is based in DENVER.
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