Wednesday, Mar 9th 2022

Titan Trade Update: We’ve sold Diversey in Offshore

Investor Update

We sold our small stake in Diversey Holdings (DSEY) due to the historical spike in commodity prices, which we believe could be a meaningful headwind for the foreseeable future.

The table below details these moves:


Diversey Holdings (DSEY) is a provider of cleaning and hygiene solutions for customers in a wide variety of sectors including Food & Beverage, Healthcare, Hospitality, and Retail industries. Diversey was a severely mismanaged company until Bain Capital (large private equity firm) acquired it in 2017.

The company just went public in March 2021, so with a limited track record of execution in public markets and potential supply chain bottlenecks as the world re-opens, we opted to start with a small toe-hold position when we first invested in December. We planned to scale up the position if our thesis was tracking, but we believe that the historic spike in oil prices we’re seeing could lead to sustained pressure on their profit margin.

To get into the nitty gritty: Raw materials make up roughly 20% of sales, which is about ⅓ of the company’s cost-of-goods-sold (COGS), of which 30% is directly linked to the oil value chain. Assuming a 5% move in the remaining COGS base, and a 25% move in propylene prices (again, oil prices have moved >50% since December), COGS is estimated to go up by ~7%.

To simplify: As costs go up, profit margin goes down, and this surge in costs should prove to be a meaningful headwind for the foreseeable future.

Although this trade went against us, we believe this is an example of why sizing is so important in portfolio construction.The negative attribution to our Offshore portfolio has been minimal. The proceeds from this sale have gone into our cash reserve in Offshore, and we have harvested these losses which may help offset gains elsewhere in client portfolios.

Please let us know if you have any questions, and thank you as always for the opportunity to manage your capital.

Onwards, Titan Investment Team

Back to Research ↗

Learn with titan

Investment articles and resources

Become the smartest investor you've ever been through straightforward, easy-to-read investment articles.

What Is Spread Trading?

What Are ETFs and How Do They Work?

What Are Futures in Stocks? Everything You Need To Know

What Are Commodity Funds & How Do They Work?

Let's Get Started

Ready to become a client?

Create an account with us in two minutes.

Or scan to get the app

We're building the best investment platform, ever

Titan Global Capital Management USA, Inc ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). By using this website, you accept our Terms of Use and Privacy Policy. Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services.

Refer to Titan's Program Brochure for more information. Certain investments are not suitable for all investors. Before investing, consider your investment objectives and Titan’s fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. The introducing Broker Dealer is Titan Global Technologies LLC, a registered broker-dealer and member FINRA/SIPC. Brokerage services are provided to Titan Clients by Apex Clearing, an SEC registered broker-dealer and member FINRA/SIPC. For more information, see our disclosures. Contact: 508 LaGuardia Place NY, NY 10012. Information provided by Titan Support is for informational and general educational purposes only and is not investment or financial advice.

© Copyright 2022 Titan Global Capital Management, Inc. All Rights Reserved.