Compass Minerals International, Inc. (CMP): Are Hedge Funds Right About This Stock?

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Is Compass Minerals International, Inc. (NYSE:CMP) a buy, sell, or hold? The best stock pickers are taking a pessimistic view. The number of long hedge fund bets dropped by 1 recently.

In the 21st century investor’s toolkit, there are many methods investors can use to monitor publicly traded companies. Some of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outpace the broader indices by a solid amount (see just how much).

Bill Miller

Equally as integral, bullish insider trading sentiment is another way to parse down the world of equities. There are many reasons for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).

Consequently, let’s take a peek at the key action encompassing Compass Minerals International, Inc. (NYSE:CMP).

What does the smart money think about Compass Minerals International, Inc. (NYSE:CMP)?

In preparation for this year, a total of 6 of the hedge funds we track were bullish in this stock, a change of -14% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly.

Of the funds we track, Third Avenue Management, managed by Martin Whitman, holds the most valuable position in Compass Minerals International, Inc. (NYSE:CMP). Third Avenue Management has a $45.9 million position in the stock, comprising 1% of its 13F portfolio. On Third Avenue Management’s heels is Royce & Associates, managed by Chuck Royce, which held a $19.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Bill Miller’s Legg Mason Capital Management and Wallace Weitz’s Wallace R. Weitz & Co..

Since Compass Minerals International, Inc. (NYSE:CMP) has experienced falling interest from the smart money, we can see that there were a few funds who were dropping their full holdings last quarter. At the top of the heap, Israel Englander’s Millennium Management cut the biggest position of the 450+ funds we monitor, valued at about $0 million in stock. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 funds last quarter.

How have insiders been trading Compass Minerals International, Inc. (NYSE:CMP)?

Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time frame, Compass Minerals International, Inc. (NYSE:CMP) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Compass Minerals International, Inc. (NYSE:CMP). These stocks are PVR Partners LP (NYSE:PVR), Alliance Resource Partners, L.P. (NASDAQ:ARLP), Titanium Metals Corp (NYSE:TIE), Tahoe Resources Inc (NYSE:TAHO), and Natural Resource Partners LP (NYSE:NRP). This group of stocks are in the industrial metals & minerals industry and their market caps resemble CMP’s market cap.

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