1. CompoSecure, Inc. (NASDAQ:CMPO)
Number of Hedge Fund Holders: 46
CompoSecure, Inc. (NASDAQ:CMPO) is a leading manufacturer and designer of complex metal, composite, and proprietary financial transaction cards. The company has established itself as a technology partner to market leaders, fintechs, and consumers, enabling trust for millions of people around the globe. CMPO specializes in innovative payment card technology and metal cards with Arculus security and authentication capabilities, delivering unique, premium branded experiences and ensuring trust at the point of transaction. The company’s main operations revolve around creating highly differentiated and customized quality financial payment products for banks and other payment card issuers, and its customer base primarily consists of leading international and domestic banks.
CompoSecure, Inc. (NASDAQ:CMPO) delivered strong Q3 2024 results with an 11% increase in net sales to $107.1 million and a 13% increase in adjusted EBITDA to $40 million. The company demonstrated robust international growth, which more than doubled compared to the prior year, driven by momentum from new products. A significant milestone was achieved with the signing of a 2-year contract extension with Capital One, demonstrating customer trust in their ability to deliver differentiated products. The company revised its 2024 guidance, with net sales expected to range between $418 million to $424 million and adjusted EBITDA between $148 million and $151 million. The Resolute Holdings transaction completed in September is expected to deliver approximately $20 million more in free cash flow annually by eliminating tax distributions.
Under the leadership of new Executive Chairman Dave Cote, CompoSecure, Inc. (NASDAQ:CMPO) is focusing on building a high-performance culture, driving efficiency through the CompoSecure Operating System, reinvigorating organic growth, and diversifying through accretive M&A. Looking ahead to 2025, while the company faces some headwinds from increased competition and rising labor costs, it maintains strong tailwinds including solid backlog, positive customer sentiment, and opportunities in fraud reduction through Arculus Authenticate. The heavy insider buying in the last six months is a confirmation of the strong tailwinds lying ahead for CMPO.
Overall CompoSecure Inc. (NASDAQ:CMPO) ranks first on our list of the 12 stocks with heavy insider buying in 2025. While we acknowledge the potential of CMPO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CMPO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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