Compass Minerals International, Inc. (CMP): A Bull Case Theory
We came across a bullish thesis on Compass Minerals International, Inc. on The Lion's Roar - Outside the Box Investments' Substack by Dominick D'Angelo. In this article, we will summarize the bull's thesis on CMP. Compass Minerals International, Inc.'s share was trading at $19.67 as of June 24th. CMP's forward P/E was 23.70 according to Yahoo Finance.
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Compass Minerals (CMP) presented a compelling opportunity after an ~85% share price collapse, which led to severely depressed sentiment and set the stage for a high-conviction turnaround bet. The team's deep research—highlighted by distributor interviews, FOIL requests, and competitor site checks—helped form a differentiated and bullish view. Estimates going into the quarter were well above consensus, and the company exceeded even those elevated expectations. Salt revenue came in at $433 million, up 39% year-over-year, driven by colder-than-average weather that boosted highway deicing and C&I demand.
A $147 million inventory reduction helped generate ~$170 million in free cash flow, with further working capital benefits expected in Q3. EPS estimates were revised materially upward across 2025–2027 on better pricing and volumes. Despite elevated production costs in Q2, likely due to lower Goderich output, capacity utilization is nearing 100%, and depots are empty ahead of the winter season, implying a robust bidding cycle. Contracts locked in during the inventory glut of mid-2024 saw a 5.2% pricing decline, but with inventories now depleted and producers unable to meet demand, Compass is positioned to capture higher-margin emergency orders.
Market checks show prices spiking as high as $82/ton in some counties versus the $71/ton average reported in Q2. As volumes normalize, Compass should see margin improvement and operating leverage kick in. Meanwhile, the plant business posted improved volumes and its first y/y price increase since Q2 2023, aided by cost-cutting at Utah. With valuable assets, falling leverage, and a favorable market backdrop, CMP remains deeply undervalued despite its recent rally.
Previously, we covered a s on Compass Minerals International, Inc. (CMP) by Dominick D'Angelo in March 2025, which highlighted its salt dominance, cost cuts, and early winter tailwinds. The company's stock has appreciated ~105% since our coverage, as the thesis played out. Dominick D'Angelo shares a similar view but emphasizes deeper research and operational momentum in the latest thesis.
Compass Minerals International, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held CMP at the end of the first quarter, which was 31 in the previous quarter. While we acknowledge the risk and potential of CMP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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