Hedge Funds Have Never Been This Bullish On Compass Minerals International, Inc. (CMP)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 28, so let’s proceed with the discussion of the hedge fund sentiment on Compass Minerals International, Inc. (NYSE:CMP).

Is Compass Minerals International, Inc. (NYSE:CMP) a worthy investment now? Hedge funds are taking a bullish view. The number of long hedge fund bets went up by 3 recently. Our calculations also showed that CMP isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.


Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the recent hedge fund action encompassing Compass Minerals International, Inc. (NYSE:CMP).

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

Heading into the third quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 23% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CMP over the last 16 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

Jeffrey Bronchick - Cove Street Capital

Among these funds, Cove Street Capital held the most valuable stake in Compass Minerals International, Inc. (NYSE:CMP), which was worth $38.4 million at the end of the second quarter. On the second spot was Lodge Hill Capital which amassed $7.5 million worth of shares. Moreover, Citadel Investment Group, Millennium Management, and Marshall Wace LLP were also bullish on Compass Minerals International, Inc. (NYSE:CMP), allocating a large percentage of their portfolios to this stock.

As aggregate interest increased, some big names have jumped into Compass Minerals International, Inc. (NYSE:CMP) headfirst. Lodge Hill Capital, managed by Clint Murray, initiated the biggest position in Compass Minerals International, Inc. (NYSE:CMP). Lodge Hill Capital had $7.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $4.6 million position during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Dmitry Balyasny’s Balyasny Asset Management, and Noam Gottesman’s GLG Partners.

Let’s check out 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 BGC Partners, Inc. (NASDAQ:BGCP), Arcosa, Inc. (NYSE:ACA), LTC Properties Inc (NYSE:LTC), and Fastly, Inc. (NYSE:FSLY). This group of stocks’ market valuations are closest to CMP’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BGCP 25 249426 -1
ACA 24 328959 -1
LTC 12 20856 3
FSLY 13 96728 13
Average 18.5 173992 3.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $174 million. That figure was $81 million in CMP’s case. BGC Partners, Inc. (NASDAQ:BGCP) is the most popular stock in this table. On the other hand LTC Properties Inc (NYSE:LTC) is the least popular one with only 12 bullish hedge fund positions. Compass Minerals International, Inc. (NYSE:CMP) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on CMP, though not to the same extent, as the stock returned 4.3% during the third quarter and outperformed the market.

Disclosure: None. This article was originally published at Insider Monkey.