Compass Minerals International, Inc. (NYSE:CMP)

CAPS Rating: 4 out of 5

The Company through its subsidiaries is a producer and marketer of inorganic mineral products with manufacturing sites in North America and the United Kingdom.


Player Avatar tekennedy (80.48) Submitted: 8/16/2010 11:54:45 AM : Outperform Start Price: $68.42 CMP Score: -50.76

I like this coompany for some of the same reasons I like the aggregates industry(read pitch VMC- Vulcan Materials): their salt sales have a low cost per ton, meaning there is low risk of substitutes, there is minimal foreign competition and the market tends to be low competition due to geographical constraints(although not to the degree of aggregates). This pick is less dependent on the overall economy as well as the majority of sales are to the highway deicing market which is driven by weather conditions. The consumer segment is also relatively large and is very stable in nature helping stabilize profitablity. The portions of the business geared toward chemicals and specialty plant nutrients is a business of which I am less certain because of significant price fluctuations, but which appears to have the potential for growth in end markets and may gain pricing power due to supply constraints. I believe the current pricing represents a good value for a long term investor and should outperform the S&P over time.

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