Why is Compass Minerals Stock so Cheap?

You might want to buy this salt company before winter comes back.

Andrew Willis 23 September, 2022 | 4:28AM
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Andrew Willis: While “Winter is Coming” might remind you of Game of Thrones, it still has some significant meaning for drivers when the snow hits the roads once again. And among the key real-life defenders here… salt companies, are melting the icy dangers of the North, and making good money doing it.

Compass Minerals (CMP) is one of the leading producers of salt – after all, it has the world’s largest salt mine. And it’s currently trading at a deep discount to our fair value estimate, all while it has already sold 75% of its contracts for the upcoming de-icing season.

The market may not be appreciating the opportunity here because Compass is being hit by cost inflation like so many companies, but as strategist Seth Goldstein notes – de-icing prices will also be rising. As a result, we expect profits to be sharply higher next year, suggesting this company is well worth its salt.

From Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Compass Minerals International Inc14.59 USD-2.15Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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