Frac sand plays are going ape-shit to the upside, following HCLP’s earnings. Bear in mind, these companies are highly levered to the shale and should see material downside revisions in their numbers. However, they are cash cows when times are good. Hence, bidders are bidding them up until the whites in the eyes of shorts pop out.
I am long both SLCA and FMSA. Aside from HCLP, EMES is the only other frac sand play public. CRR is related, but ceramics. These are some of the most heavily shorted stocks in the oil space. Needless to say, these stocks can continue their war-path higher, providing they receive the appropriate amount of tinder.
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just sold a bunch more of my OIL/USO. (most of it). Gotta take these profits. Dipped into some more biotech on the profit taking there although we could go lower. a little JUNO, BLCM, FPRX, couple others. also like new ETF SBIO right at this level. Interesting ETF and holdings. looks at companies with phase 2 and phase 3 pipeline drugs.
Nice find.I would say you could buy FBT and add SBIO for a kicker.Don’t see tons of overlap.
In the left lane with Rick Ross blaring through the Impala’s speakers.
time 2 take some profits son
Fly, your rhetorical imagery is unsurpassed. I had no idea your basis for SLCA was $35 – will you be holding for that price? higher? Despite today’s rally, I’m sure your FMSA basis is also higher? I feel like picking up FMSA, do you think the frac names will continue much higher after a two day rally?
According to analysts, SLCA will still see a 15% jump in revs in 2015 and will make about as much in EPS ($2.34) as it is expected to make in 2014 ($2.44). That 2015 number is down from $3.59 90 days ago, but if SLCA can mildly outperform expectations and make closer to $3 in 2015 we’ll have a company that, through a downturn, earned 20% more on about that much more in revs than the year before. Think that deserves a PE of 10? When 2017 estimates could be $4? My guess is by late 2015 SLCA will be trading at 15x 2017 estimates of $4 – or $60/ share. Just guesses but I don’t think far fetched ones. Fly’s $35 purchase price won’t look too bad in 7 or 8 months methinks…
HCLP conference call dripped with confidence in their business. Reiterating 2015 EBITDA and even talking of raising distribution again.