Is Compass Minerals International, Inc. (CMP) Going to Burn These Hedge Funds?

Because Compass Minerals International, Inc. (NYSE:CMP) has witnessed a decline in interest from the smart money, logic holds that there exists a select few funds that decided to sell off their positions entirely in the third quarter. Intriguingly, Citadel Investment Group dropped the biggest investment of the 700 funds followed by Insider Monkey, worth close to $1.2 million in call options. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also said goodbye to its stock, about $0.5 million worth of CMP shares.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Compass Minerals International, Inc. (NYSE:CMP) but similarly valued. These stocks are TCF Financial Corporation (NYSE:TCB), Kosmos Energy Ltd (NYSE:KOS), Essent Group Ltd (NYSE:ESNT), and Valley National Bancorp (NYSE:VLY). This group of stocks’ market valuations are closest to CMP’s market valuation.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $74 million in CMP’s case. TCF Financial Corporation (NYSE:TCB) is the most popular stock in this table. On the other hand Kosmos Energy Ltd (NYSE:KOS) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Compass Minerals International, Inc. (NYSE:CMP) is even less popular than KOS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none.