Compass Minerals International (CMP) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Compass Minerals International ( CMP) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Compass Minerals International as such a stock due to the following factors:

  • CMP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.1 million.
  • CMP has traded 82,022 shares today.
  • CMP traded in a range 355.6% of the normal price range with a price range of $5.04.
  • CMP traded above its daily resistance level (quality: 277 days, meaning that the stock is crossing a resistance level set by the last 277 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on CMP:

Compass Minerals International, Inc., through its subsidiaries, produces and markets inorganic mineral products primarily in North America and the United Kingdom. It operates in two segments: Salt and Specialty Fertilizer. The stock currently has a dividend yield of 2.9%. CMP has a PE ratio of 21.4. Currently there are no analysts that rate Compass Minerals International a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Compass Minerals International has been 274,700 shares per day over the past 30 days. Compass Minerals International has a market cap of $2.8 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.92 and a short float of 2.5% with 2.26 days to cover. Shares are up 4.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Compass Minerals International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 45.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COMPASS MINERALS INTL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, COMPASS MINERALS INTL INC increased its bottom line by earning $3.89 versus $2.65 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.89).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Metals & Mining industry and the overall market, COMPASS MINERALS INTL INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Net operating cash flow has significantly increased by 393.33% to $96.20 million when compared to the same quarter last year. In addition, COMPASS MINERALS INTL INC has also vastly surpassed the industry average cash flow growth rate of -48.79%.
  • CMP's debt-to-equity ratio of 0.86 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.44 is sturdy.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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