O'Keefe Stevens' New Portfolio Addition: Compass Minerals (CMP)

O’keefe Stevens Advisory, an investment advisory firm, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The firm views AI as a dominant theme in today’s market landscape, continuously exploring new and innovative applications. Its ability to transform workflows has proven to be impactful. While stories of AI errors often capture attention, they tend to overshadow the broader paradigm shift underway. For investment analysts, the ability to distinguish meaningful insights from AI-generated “hallucinations” is becoming an essential and strategic skill. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025.

In its second-quarter 2025 investor letter, O’keefe Stevens Advisory highlighted stocks such as Compass Minerals International, Inc. (NYSE:CMP). Compass Minerals International, Inc. (NYSE:CMP) is an essential minerals provider that operates through Salt and Plant Nutrition segments. The one-month return of Compass Minerals International, Inc. (NYSE:CMP) was -2.77%, and its shares gained 111.23% of their value over the last 52 weeks. On August 8, 2025, Compass Minerals International, Inc. (NYSE:CMP) stock closed at $21.44 per share, with a market capitalization of $892.344 million.

O’keefe Stevens Advisory stated the following regarding Compass Minerals International, Inc. (NYSE:CMP) in its second quarter 2025 investor letter:

We added one new position during the quarter, Compass Minerals International, Inc. (NYSE:CMP). Never dismiss where an idea might come from. Waiting in line to get a smoothie and chatting with the guy behind you might be the most unconventional inspiration I’ve heard in a while. Right place, right time.

Compass Minerals is a leading producer of salt, plant nutrition, and specialty minerals. The company operates the Goderich mine, the largest salt mine in the world. Goderich’s geographic advantage on the Great Lakes gives it a virtual monopoly in certain Midwestern municipalities, since salt’s low unit value and high shipping costs make long-distance supply uneconomical. After several poor capital allocation decisions, including developing a lithium mine that was ultimately canceled due to increased regulatory risks, and acquiring a fire retardant business that was recently shut down in Q1 because of poor testing results and the loss of a government contract, their historic dividend-focused policy shifted to a growth capex approach. In November 2021, the dividend was cut by 79% to fund these growth opportunities, but it was fully eliminated in May 2024 due to rising debt costs and weak performance in their salt business. Finally, on 9/6/24, S&P announced that Compass Minerals would be removed from the S&P 600 small-cap index. Finding situations where buyers and sellers are indifferent to price and forced to act regardless of fundamentals is a good strategy. We started purchasing Compass at the end of Q1 and throughout Q2.

In January 2024, Compass Minerals embarked on a clear strategic reset when Edward Dowling replaced Kevin Crutchfield as CEO. Under Crutchfield’s leadership, the company’s shares lost about 57% of their value (excluding dividends), as capital was invested in non-core ventures, from the ambitious but ultimately halted lithium-extraction project at the Great Salt Lake to the $100 million acquisition of Fortress North America’s fire-retardant business. Recognizing the need to regain shareholder confidence, Dowling has since eliminated these distractions, shutting down the unprofitable chemicals unit and refocusing the company on its two core businesses: highway-deicing salt and specialty sulfate-of-potash (SOP) fertilizers, adopting a “back to basics” strategy..." (Click here to read the full text)

Compass Minerals International, Inc. (NYSE:CMP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Compass Minerals International, Inc. (NYSE:CMP) at the end of the first quarter, which was 31 in the previous quarter. For the second quarter of 2025, Compass Minerals International, Inc. (NYSE:CMP) reported consolidated revenue of $495 million, a 36% increase year-over-year. While we acknowledge the potential of Compass Minerals International, Inc. (NYSE:CMP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Compass Minerals International, Inc. (NYSE:CMP) and shared the list of metal stocks with insider buying in 2025. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.