What Makes Compass Minerals (CMP) an Investment Bet?

O’keefe Stevens Advisory, an investment advisory firm, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In a volatile first quarter, equity price movements exceeded downside underwriting assumptions. The firm is cautious in assessing downside risk, as disappointing earnings often lack immediate price support. The market seems to believe no valuation is too low when earnings miss expectations, whether the issues are temporary or structural. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025.

In its first-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 the Salt and Plant Nutrition segments. The one-month return of Compass Minerals International, Inc. (NYSE:CMP) was 41.77%, and its shares gained 1.96% of their value over the last 52 weeks. On May 1, 2025, Compass Minerals International, Inc. (NYSE:CMP) stock closed at $13.00 per share with a market capitalization of $539.553 million.

O’keefe Stevens Advisory stated the following regarding Compass Minerals International, Inc. (NYSE:CMP) in its Q1 2025 investor letter:

"During the quarter, we initiated three new positions: BMW (Ticker: BMWKY), Mercedes-Benz (Ticker: MBGYY), and Compass Minerals International, Inc. (NYSE:CMP).

Compass Minerals (Full report here) – High-quality assets trading at attractive prices stemming from recent management mistakes, removal from the S&P 600 index, and warmer winters resulted in this stock trading down to 6x our estimated normalized earnings. Salt road de-icing does not care whether the market is up or down, consumer preferences, or AI; salt must be bought if it snows. Compass is a high-quality business with a new management team and a back-to-basics agenda. Several side projects, including a fire retardant and a lithium extraction project, distracted their core salt and Sulfate of Potash (SOP) business. With these projects eliminated, combined with a typical winter, it will demonstrate the normalized earnings power of their business."

Compass Minerals International, Inc. (NYSE:CMP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Compass Minerals International, Inc. (NYSE:CMP) at the end of the fourth quarter, compared to 29 in the third quarter. While we acknowledge the potential of Compass Minerals International, Inc. (NYSE:CMP) 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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Compass Minerals International, Inc. (NYSE:CMP) and shared the list of best magnesium stocks to buy. In addition, please check out our hedge fund investor letters Q1 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.