Why a Fund Trimmed a $41 Million CompoSecure Stake Amid a 47% Stock Run
Key Points
Charlotte-based Tikvah Management sold 280,000 CMPO shares in the third quarter.
The overall position value fell by $9.31 million from the previous period.
As of September 30, the fund reported holding 1.97 million shares valued at $41.01 million, making it the portfolio's third-largest reported asset.
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Charlotte-based Tikvah Management cut its stake in CompoSecure (NYSE:CMPO) by 280,000 shares and saw its position value reduced by an estimated $9.31 million, according to a November 14 SEC filing.
What Happened
According to a Securities and Exchange Commission (SEC) filing dated November 14, Tikvah Management reduced its position in CompoSecure (NYSE:CMPO) by 280,000 shares in the third quarter. The fund’s holding decreased to 1.97 million shares with an estimated $9.31 million reduction in position value for the period. The position now represents 12.11% of Tikvah’s $338.71 million in reportable U.S. equity assets.
What Else to Know
Tikvah Management’s sale leaves CompoSecure at 12.11% of AUM, maintaining its status as the fund’s third-largest holding out of 23 positions.
Top holdings after the filing:
- NASDAQ:GOOGL: $65.70 million (19.4% of AUM)
- NASDAQ:AMZN: $64.92 million (19.2% of AUM)
- NYSE:CMPO: $41.01 million (12.1% of AUM)
- NYSE:BIO: $31.15 million (9.2% of AUM)
- NYSEMKT:SPY: $22.05 million (6.5% of AUM)
As of Tuesday, CMPO shares were priced at $19.37, up 47% over the past year and well outperforming the S&P 500, which is up about 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Tuesday) | $19.37 |
| Market Capitalization | $2.45 billion |
| Revenue (TTM) | $160.68 million |
| Net Income (TTM) | ($216.66 million) |
Company Snapshot
- CompoSecure manufactures metal, plastic, and composite financial transaction cards, as well as the Arculus Cold Storage Wallet for digital asset security.
- Its main customers include financial institutions, government agencies, system integrators, and security specialists in the United States and internationally.
- The company was founded in 1910 and is headquartered in Somerset, New Jersey.
CompoSecure, Inc. provides high-security payment cards and digital asset storage solutions, leveraging advanced materials and proprietary technology.
Foolish Take
This move matters less as a bearish call on CompoSecure and more as a reminder of how disciplined portfolio construction actually works. When a position grows into a double-digit percentage of assets after a strong rally, trimming can be a risk-management decision rather than a loss of conviction.
Operationally, CompoSecure is doing things right. Third-quarter net sales rose 13% year over year to $120.9 million, gross margin expanded to 59%, and pro forma adjusted EBITDA jumped 30% to $47.7 million. Management raised full-year 2025 guidance and issued 2026 targets calling for continued double-digit growth.
The complication is scale and complexity. The recently announced business combination with Husky Technologies values the combined entity at roughly $7.4 billion and introduces leverage, integration risk, and a different earnings profile. While the deal is expected to be accretive, it also changes the story from a focused security and payments manufacturer into something broader and harder to model. Ultimately, against a portfolio dominated by mega-cap tech and index exposure, trimming CompoSecure after such a solid run looks prudent.
Glossary
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
13F Reportable Assets: U.S. equity securities that institutional investment managers must disclose quarterly to the SEC on Form 13F.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or share held in a company by an investor or fund.
Holding: A specific asset or security owned within an investment portfolio.
Outperforming: Achieving a higher return or growth rate compared to a benchmark or index.
S&P 500: A stock market index tracking the performance of 500 large U.S. companies.
System Integrators: Companies that combine various technology products and services into a unified solution for clients.
Proprietary Technology: Technology owned and controlled by a company, often protected by patents or trade secrets.
Cold Storage Wallet: An offline device or method used to securely store digital assets like cryptocurrencies.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.
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