Trade-Ideas: Compass Minerals International (CMP) Is Today's

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 $38.3 million.
  • CMP has traded 720,272 shares today.
  • CMP traded in a range 240.1% of the normal price range with a price range of $3.81.
  • CMP traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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. produces and markets salt, sulfate of potash specialty fertilizer (SOP), plant micronutrients, and magnesium chloride primarily in North America and the United Kingdom. The stock currently has a dividend yield of 3.9%. CMP has a PE ratio of 17. Currently there is 1 analyst that rates Compass Minerals International a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Compass Minerals International has been 377,500 shares per day over the past 30 days. Compass Minerals International has a market cap of $2.4 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.51 and a short float of 13.8% with 9.08 days to cover. Shares are down 6.9% 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 expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • 35.44% is the gross profit margin for COMPASS MINERALS INTL INC which we consider to be strong. It has increased from the same quarter the previous year.
  • Despite the weak revenue results, CMP has significantly outperformed against the industry average of 45.9%. Since the same quarter one year prior, revenues fell by 12.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 18.0% when compared to the same quarter one year ago, dropping from $60.60 million to $49.70 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. 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.
  • The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, CMP has managed to keep a strong quick ratio of 1.62, which demonstrates the ability to cover short-term cash needs.

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