Cove Street Capital Reset its Position in Compass Minerals (CMP) to 2.5% from 5%

Investment management company Cove Street Capital recently released its “Small Cap Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -10.77% (net of fees) compared to -3.28% for the Russell 2000 Index and -3.64% for the Russell 2000 Value Index. For the first half of 2024, the S&P 500 is up 15%. Its biggest component, Nvidia, has increased by 150% over that time. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Cove Street Capital Small Cap Value Fund highlighted stocks like Compass Minerals International, Inc. (NYSE:CMP), in the second quarter 2024 investor letter. Compass Minerals International, Inc. (NYSE:CMP) is an essential minerals provider. The one-month return of Compass Minerals International, Inc. (NYSE:CMP) was -14.78%, and its shares lost 68.69% of their value over the last 52 weeks. On July 10, 2024, Compass Minerals International, Inc. (NYSE:CMP) stock closed at $10.44 per share with a market capitalization of $431.525 million.

Cove Street Capital Small Cap Value Fund stated the following regarding Compass Minerals International, Inc. (NYSE:CMP) in its Q2 2024 investor letter:

"We have reset our position in Compass Minerals International, Inc. (NYSE:CMP) to 2.5% from 5%. The valuation being accorded to its two “irreplaceable” U.S. assets in salt and sulfate of potash are worth multiples of the current value of the stock, but weather headwinds have sucked the life out of the equity. Said another way, the company has been idiotically run and managed with a mindset that weather is NOT an issue in agriculture and de-icing salt and that has cost us dearly to date. A 72-year-old Board member has stepped in as CEO with a very obvious mission: reduce costs and sell the company. We again would note the Koch family paying $36 per share for a 17% share in the company, among other unhappy people."

A close up of an essential mineral being extracted from a large rock wall.

Compass Minerals International, Inc. (NYSE:CMP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held Compass Minerals International, Inc. (NYSE:CMP) at the end of the first quarter which was 14 in the previous quarter. In the fiscal second quarter of 2024, Compass Minerals International, Inc. (NYSE:CMP) generated consolidated revenue of $364 million, down 11% year-over-year. While we acknowledge the potential of Compass Minerals International, Inc. (NYSE:CMP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Compass Minerals International, Inc. (NYSE:CMP) in another article and shared the list of best potash stocks to buy. Cove Street Capital Small Cap Value Fund commented about Compass Minerals International, Inc. (NYSE:CMP) in its Q1 2024 investor letter. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

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