Compass Minerals (CMP) is Facing Fundamental Problems
Investment management company Cove Street Capital recently released its “Small Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The firm concluded an unsatisfactory fiscal year of operations. It owns a few not-so-good holdings and some delayed-gratification positions since the market generally dislikes small-cap value stocks. In the third quarter, the fund returned 3.70% (net of fees) compared to 9.27% for the Russell 2000 Index and 10.15% for the Russell 2000 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Cove Street Capital Small Cap Value Fund highlighted stocks like Compass Minerals International, Inc. (NYSE:CMP), in the third quarter 2024 investor letter. 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 56.76%, and its shares lost 55.43% of their value over the last 52 weeks. On October 7, 2024, Compass Minerals International, Inc. (NYSE:CMP) stock closed at $12.18 per share with a market capitalization of $503.446 million.
Cove Street Capital Small Cap Value Fund stated the following regarding Compass Minerals International, Inc. (NYSE:CMP) in its Q3 2024 investor letter:
"Viasat (ticker: VSAT), E.W. Scripps (ticker: SSP), and Compass Minerals International, Inc. (NYSE:CMP) were our biggest detractors this year. Each has specific fundamental problems, but they share perceptions of balance sheet issues that we would suggest are producing grossly negative viewpoints on their respective stock prices. Viasat just refinanced most of its debt stack which puts that to rest; Scripps has stated they will sell its Bounce TV network by the November earnings call; and Compass booted its CEO, and we believe we are days or quarters from a “for sale” sign. Not our finest moments, but all are stupid cheap in our opinion with real asset support. Recent Fed decisions should help here."
A close up of an essential mineral being extracted from a large rock wall.
Compass Minerals International, Inc. (NYSE:CMP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Compass Minerals International, Inc. (NYSE:CMP) at the end of the second quarter which was 25 in the previous 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 discussed Compass Minerals International, Inc. (NYSE:CMP) and shared the list of worst falling stocks to buy. In the previous quarter Cove Street Capital Small Cap Value Fund reset its position in Compass Minerals International, Inc. (NYSE:CMP) from 5% to 2.5%. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.