Why a Fund Trimmed a $41 Million CompoSecure Stake Amid a 47% Stock Run | The Motley Fool

Charlotte-based Tikvah Management cut its stake in CompoSecure ( CMPO +0.73%) 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 ( CMPO +0.73%) 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...

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