January 22, 2009 - Compass Minerals International (CMP-NYSE) through its subsidiaries, produces and markets inorganic mineral products in North America and the United Kingdom. It operates in two segments: Salt and Specialty Fertilizer.

The Specialty Fertilizer segment produces and markets potash crop nutrients and industrial grade sulfate of potash, which are used in the production of specialty fertilizers for vegetables, fruits, tea,potatoes, nuts, tobacco, and turf grass. The company operates 10 production and packaging facilities, including a rock salt mine in Goderich, Ontario and a salt mine in Winsford, the United Kingdom.

Compass Minerals International markets its products through retail channels, such as grocery stores, building supply, hardware, mass merchants, and feed suppliers. The company was founded in 1993. It was formerly known as Salt Holdings Corporation and changed its name to Compass Minerals International, Inc. in 2003. Compass Minerals International is headquartered in Overland Park, Kansas.

The company went public in 2003, had earnings of $1.01. For 2007, it reported earnings of $2.09. In 2008, analysts predict the year finished at $4.69 (no, that's not a typo). Next year, they see $7.09. Earnings will be announced on February 9. For the fourth quarter, analysts think the company earned $2.20. For the first quarter of this year, they forecast $2.13.

This stock started trading in 2003, hitting a low of $13 a share. It has gone almost unwaveringly higher until the middle of 2008, when it peaked at $87.90. It's taken a breather since then, hitting a low of $35.30 in the latter part of last year. Now, it seems to be on the mend, but it obviously has high volatility, and investors with weak stomachs need read no further.

Sales are jumping, right along with earnings. In the third quarter of last year, they were up 70%. Strong demand for deicing salt is part of the reason as the first storms hit hard and froze many roads. Their other product is also selling well, sulfate of potash speciatly fertilizer. Since the company offers items that are non-discretionary, it has a good chance of strong improvement no matter what the economy does. If ice is on the road, governments need to buy salt. If farmers want crops, they need to fertilize.

The company has expansion plans. It formed a new division called Pristiva. It focuses on providing mineral-based solutions for saltwater pools. Another subsidiary, North American Salt Company, added 3 formulations to its Nature's Own portfolio of water care products. In the company's Ontario salt mining operations, a capacity upgrade is in the works. Forecast to finish by 2012, the new effort will improve processes and bring annual production capacity to about 9 million tons. This plant supplies a lot of salt to Utah where demand continues to grow.

Another project increases the company's production of sulfate of potash specialty fertilizer. Compass formed an agreement with the state of Utah to exchange undeveloped existing leases for those covering 37,000 acres in highly saline areas of the Great Salt Lake. The land is almost perfect for solar evaporation and would allow the company to increase its capacity.

More numbers: Market Cap is $1.66 billion. Trailing P/E is 13.1 and the Forward P/E is 7.24. The operating margin for the last 12 months was 20.12% with a profit margin of 11.74%. Total debt is $508 million. There are 32.425 million shares outstanding. Book Value per share is 91 cents. Current ratio is 1.926. There is an annual dividend of $1.34 giving a yield of 2.6%.

Compass Minerals seems to have a bright future. It has products people need, and management that delivered good earnings and sales growth. But the stock demonstrated high volatility in the last year with steep drops from high places. Keep that in mind as you dig deeper.

- Company Web site: www.compassminerals.com

- Ted Allrich