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In February 2025, Investing.com’s Fair Value models identified Compass Minerals International, Inc. (NYSE:CMP) as significantly undervalued, trading at just $11.42 per share. Nine months later, investors who followed this analysis have been rewarded with a remarkable 65% return as the stock trades at $17.92, nearly reaching our Fair Value target of $18.81. This success story demonstrates the power of Fair Value analysis in helping investors identify mispriced stocks, find optimal entry points, and make more informed investment decisions based on intrinsic value calculations. For investors seeking similar opportunities, our Most undervalued list highlights stocks our models currently identify as trading below their intrinsic value.
Compass Minerals operates in the Basic Materials sector, primarily providing essential salt and plant nutrition products. When our Fair Value models flagged CMP in February, the company was facing challenges, reporting revenues of $1.08 billion and an EPS of -$3.74. The stock had experienced significant volatility in the preceding months, with price swings ranging from -33.6% to +36.1% monthly. Despite these fluctuations, our comprehensive valuation methodology indicated the stock was trading at a nearly 50% discount to its intrinsic value, with a financial health relative score of 2.27 suggesting adequate stability despite operational challenges.
The subsequent performance validated our analysis. After our February identification at $11.42, the stock experienced a transformative rally in April and May 2025, with monthly returns of 44.7% and 42.9% respectively. This propelled CMP toward our Fair Value target, delivering a 65% total return in just nine months. The accuracy of our model was further confirmed when the stock hit $18.81 in September, precisely matching our Fair Value target price.
Recent developments have supported the investment thesis. The company reported significantly improved Q4 results that triggered a 9.9% single-day stock surge, backed by upbeat guidance. While Compass Minerals has faced some headwinds, including credit rating downgrades from S&P and Moody’s, its operational metrics have shown marked improvement. Current financials reveal revenue growth to $1.22 billion (a 13.1% increase) and reduced losses with EPS improving to -$2.90 from -$3.74. Particularly impressive was the Salt segment’s 39% surge reported in Q2 2025, demonstrating the company’s operational improvements.
InvestingPro’s Fair Value analysis that identified this opportunity combines multiple valuation methodologies to determine a stock’s intrinsic value. This approach aggregates discounted cash flow models, comparable company analyses, dividend discount models, and market range assessments to provide a comprehensive valuation picture. By considering both current fundamentals and future growth potential, our models can identify significant disconnects between market price and intrinsic value, as demonstrated in this Compass Minerals case.
Investors seeking to identify similar opportunities can access InvestingPro’s comprehensive suite of valuation tools. Beyond Fair Value analysis, subscribers gain access to financial health scores, real-time fundamental data, and proprietary metrics that help identify mispriced stocks before the broader market recognizes their potential. With a track record of success stories like Compass Minerals, InvestingPro continues to help investors make data-driven decisions in volatile markets. Learn more about InvestingPro to discover your next potential 65% gainer.