Tech World: Compass Minerals Showing Great Sales Growth
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May 6, 2008
Compass Minerals CMP Compass Minerals International, Incorporated (CMP) is a salt producer in North America and the United Kingdom. The company operates 10 production and packaging facilities, including the rock salt mine in Goderich, Ontario and a salt mine in the United Kingdom in Winsford, Cheshire.
The company’s product lines include salt and sulfate of potash, and it operates a records management business. Salt consists of sodium chloride, potassium chloride and magnesium chloride. These products are used for highway deicing, dust control, consumer deicing, water conditioning, consumer and industrial food preparation, agricultural and industrial applications. In addition, Compass is a producer of sulfate of potash, which is used in the production of specialty fertilizers for high-value crops and turf. In the United Kingdom, the company operates a records management business utilizing excavated areas of its Winsford salt mine with two other locations in London, England
The company’s product lines include salt for highway deicing, consumer deicing, water conditioning, consumer and industrial food preparation, agriculture and industrial applications. The sulfate of potash is used in the production of specialty fertilizers to improve the yield and quality of high-value crops and to improve the durability of turf grasses. Compass Minerals International began trading on the New York Stock Exchange on December 12, 2003 under the ticker CMP.
The stock is solid fundamentally with great sales growth and strong earnings growth. The latest earnings announcement showed that sales were up 44 percent over the prior-year quarter to $380.0 million as a result of brisk deicing sales in North America along with robust pricing and demand for sulfate of potash specialty fertilizers. Net earnings improved 88 percent to $49.1 million, or $1.48 per diluted share, from $26.1 million, or $0.80 per diluted share, in the first quarter of 2007. Cash flow from operations increased 81 percent to $145.5 million.
This stock is in a distinct Elliott Wave-4 buy formation, projecting gains into the $90 per share area by August. The company does have a liquid options market that currently extend out to December allowing the options strategist more than enough time to trade this opportunity.
Figure 1: Daily Elliott Wave-4 Buy Pattern for Compass Minerals
(Source: Profit Source)
Happy Trading.
Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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