Today's stock selection:
CMP Compass Minerals International Inc.
Inspired by:
http://www.zacks.com/rank/zcommentary/?id=7867
The company's stock price has more than doubled, opening the year trading at $40 and recently moving past the $82 mark. Compass's first-quarter results were impressive, posting an 88% jump in income from just last year. With robust demand and strong pricing power to boot, this stock looks well positioned to continue its upward ascent.
First-Quarter Results
Sales were up 44% from last year to $380 million. Net income up 88% from last year to $49.1 million, producing earnings of $1.48 per share, safely ahead of analyst estimates of $1.27 per share.
This marks the second time in two quarters that Compass has easily beaten analyst estimates, having done so by 24% last quarter after reporting earnings of $1.31 per share.
Compass said that the solid quarterly results were driven by exceptional sales in North America coupled with strong pricing power.
Cash In Hand
At a time when plenty of companies are struggling to maintain liquidity, Compass is padding its coffers with cash. The $145.5 million that the company reported in cash flow from operations was an 88% improvement from last year and can be used as leverage when exploring opportunities down the road.
Compass's current-year estimate is up two cents in the last thirty days to $3.90 per share.
The Chart
As previously mentioned, shares of Compass have had a great run in 2008, starting the year trading below $40 and recently toping off at over $82, a very impressive 100% return. Moving forward, this stock needs to clear the level just above $83, the 52-week and all-time high, in order to advance into uncharted territory. But as it has demonstrated already, this is a company that has the growth in earnings to back up a strong stock price. And that bodes well for investors. Take a look at the chart below.
$84.72 (06/17/08)
