Compass Minerals: Pointed in the Right Direction

Compass Minerals (CMP) is a worldwide leader in the production of and distribution of inorganic minerals. Their products and services include water softener salt, packed deicers, industrial salts, road deicing, sulfate of potash, and data storage.

The company, based in Kansas City, operates some of the largest and longest running salt mines in North America and the United Kingdom. Up until recently, Compass Minerals was almost entirely dependent on seasonal sales of its deicing services and packed deicers for its annual revenues and profits. This is changing, however, as sales of sulfate of potash accounted for nearly 14 percent of revenues for the three month period ending December 31, 2006.

Moreover, the company has entered into the data storage business and has recently completed an acquisition of Interactive Records Management (a U.K. firm) more than doubling capacity in this very lucrative area.

Other positives for Compass Mineral's shareholders include management is committed to paying down the enormous debt that the company acquired as a result of being taken over by a private equity firm a few years ago and rasing the dividend. The latter can be attested by the recent 4.9 percent hike that the board authorized Feb. 12th. Likewise, the former can be attested to the early payoff of a significant portion of CMP's outstanding debt in 2006 saving the company a great deal in interest payments over the next several years.

For purposes of disclosure, I own shares in this company and believe that it will outperform the market for many years to come.

CMP 1-yr chart

Disclosure: Author holds shares of CMP.