John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Activists Need Not Apply: CompX International Is Breaking Up To Maximize Value

Key takeaways

  • CompX International (NYSEMKT:CIX) is running the typical activist playbook by selling the lower margin furniture business and unneeded land/facilities as well as eliminating all debt.
  • However, the stock trades near the lower end of its historical valuation range providing an attractive entry point.
  • Moreover, the recent turnaround at the persistently struggling marine components segment and continued strong performance at the security products segment support a higher multiple.
  • Furthermore, the recent passing of legendary investor and controlling shareholder Harold Simmons (a monumental tragedy and not to be minimized in any way) is likely to result in a more rapid pricing in of a full breakup scenario.

Company overview

CIX is a manufacturer of locking systems used in...

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