5 Small Cap Stocks With Wide Moats

1. Compass Minerals International, Inc. (NYSE:CMP)

Number of Hedge Fund Holders: 20

Market Capitalization as of December 27: $1.71 billion

Compass Minerals International, Inc. (NYSE:CMP) is a diversified metals and mining company. It produces and sells essential minerals in the US, Canada, the UK, and internationally.

Within the mining segment, Compass Minerals International, Inc. (NYSE:CMP) focuses on a niche area: salt and plant nutrition. This means the company has identified a specialized area within the mining segment where it has been able to become a lead player. In the third quarter, the company’s salt segment included a 10% increase in its total revenues, with EBITDA margins at 20% to 28%.

Compass Minerals International, Inc. (NYSE:CMP) had 20 hedge funds long its stock in the third quarter. Their total stake value was $139 million.

Investment management company Cove Street Capital mentioned Compass Minerals International, Inc. (NYSE:CMP) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Our largest contributor in the quarter was Compass Minerals International, Inc. (NYSE:CMP) which continues to be either our best or worst performer any numbers of quarters in a row, for reasons that have little to do with long-term value drivers. The key variable here is the successful repricing on annual municipal contracts for road de-icing salt, the results of which will show up in the first half of 2023 snow season. That movement accounts for most of our now $65-ish value on the dilution from the sale of 17% of company shares to a Koch energy unit, which is funding and assisting in the development of the company’s Lithium asset on the Great Salt Lake. Having done an immense amount of work in the space, we have concluded that Compass’s asset is the “tallest height-challenged North America Lithium project,” albeit that bar is very low. Again, we also own the potential of something positive happening here, given the incredibly large gap between “we want electric cars” and “where the heck are we going to get the Lithium for the batteries. That’s particularly the case if China and South American supply proves a challenge in cost and availability.”

See also 15 Most Trusted Companies in the World and 11 Best ADR Stocks To Buy.