Basic Energy Services, one of my most favorite positions, is reporting Q1 earnings after the close.

The stock is up ~80% since the start of the year. Accordingly, it is being afforded a little break today, while longs lock in some gains.

Cain Hammond Thaler will not be among the profiteers, as he is resting self-assuredly in his 9th floor office, indifferent to the prospect of a BAS sell off. Cocky, even.

Natural gas spot pricing is back to $4.70. That is a huge rebound from the mighty flush out that first put the natural gas sector on ice. Since which time, BAS and strengthened their corporate entity, engaging in buy outs and solidifying the balance sheet.

Let’s see what they can do.

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Let’s just take a second to really breath in the absurdity that takes place around us on a day by day basis, shall we?

Here is a recent history of analyst recommendations for BAS (one of my favorite positions, I will say right off the bat, since it traded at $12).

Look specifically at the ratings being issued by Wunderlich Securities. On October 28, 2013, Wunderlich downgraded BAS from a Hold to a Sell. Then, yesterday, they upgraded BAS from a SELL to a HOLD.

And now let’s look at the price action in BAS.

Wunderlich almost marked the explosive upside to the inflection point. If we don’t go anywhere, they will have “downgraded” 100% of equity gains.

Okay so Wunderlich blew the call and got it wrong. They then reversed their rating to a Hold from a Sell (if you listened you missed out on a move that is being converted to a logarithmic scale on most finance sites). Fair enough – mistakes happen.

That’s not what irritates me. This is what irritates me:

“Will This Upgrade Help Basic Energy Services (BAS) Stock Today?

NEW YORK (TheStreet) — Basic Energy Services Inc. (BAS_) was upgraded to “hold” from “sell” at Wunderlich Securities.

The firm upgraded their rating based on improvements in the weather and natural gas prospects.”

Will this upgrade help BAS? I would fucking hope not…

I don’t want to sound indignant here because I guess as a shareholder, any good news is welcome. But…Christ…

We have just devolved to the point of putting anything out there that we can slap a curious headline on to whore a few hits on a website. After a miss like that, why should Wunderlich Securities’ have the ability to move markets with regards to BAS? If I were to make a list of analyst opinions I care about when it comes to BAS, Wunderlich (and basically half the others on that sheet at the top of this post)…they’re not even at the bottom, okay? They’re not even on the list.

The 24/7 “news about nothing” cycle just starts to grind on you after a while. We have a multi-million (billion?) dollar industry that seems to exist for the sole purpose of employing people to tell me stuff. Why I should listen though…as of yet, nobody has really explained that.

Maybe The Street should instead do a story about how many analysts (including their own) completely missed an obvious buying opportunity. And if you relegate yourself to those sites (rather than read the grassroots efforts of iBankCoin or like), you probably had no idea.

Because less I let this slip by, here’s The Street’s own rating for BAS:

TheStreet Ratings team rates BASIC ENERGY SERVICES INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

“We rate BASIC ENERGY SERVICES INC (BAS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company’s strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins.”

What’s that? Sorry I’m too busy being up 130% on this position to hear you.

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Good morning and I hope I find you well.

The 9th Floor’s estate is in tatters from the storm, with many trees down and trash littering the landscape. The weekend was warm and pleasant save for Saturday, which brought wanton destruction to many in this good state.

I bought back MAA this morning for $67.74 a share. Cash is down to 10% of account value.

I owned MAA as a legacy position from CLP being bought out last year. I sold the shares back when I was raising cash heavily towards the beginning of 2014. I always communicated a desire to buy back in and if you would like to read up on the position and reasons for owning, a quick search of my archives under MAA or CLP should get you plenty well started.

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I added to HCLP for $39.42.

I also nibbled on some more UEC for $1.13 (WARNING: if you are following at home, this position is to be kept LIGHT. I’m at less than 3% of assets, with a 1.5% unrealized loss on this. It’s down almost 40% YTD – my worst call this year so far – but precisely because I’ve been keeping it small, that’s not a problem. This is a true investment, not a trade. Big cash flow losses are expected in early years of a young company, but bad luck could easily snuff out any holders to $0.00)

My cash position is still right around 20%, thanks to capital losses. *hurray*

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HCLP just amended another supply agreement to jack up the amount of sand one of their customers is obligated to buy every month. This is the third one this year.

Per MarketWatch:

Houston, Texas – April 8, 2014 – Hi-Crush Partners LP (NYSE: HCLP), or Hi-Crush, today announced the entry into of an amendment to the supply agreement between Hi-Crush Operating LLC, a subsidiary of Hi-Crush, and FTS International, LLC, or FTSI, a leading provider of well completion services. The amendment significantly increases the number of committed volumes under the agreement, extends the term of the supply agreement and requires FTSI to pay a specified price for a specified minimum volume of frac sand each month. “Hi-Crush is excited to further extend and strengthen our relationship with FTSI by entering into this amendment,” said James M. Whipkey, Co-Chief Executive Officer of Hi-Crush. “We consider FTSI a valuable partner as we continue to expand our market presence, and fulfilling our customers’ needs is a top priority for Hi-Crush.”

And when they say “requires FTSI to pay a specified price for a specified minimum volume of frac sand each month.”…question? Do you suppose that would mean a higher “specified price”?

I would suppose it would.

This follows the news yesterday that HCLP was going to have themselves an offering to completely buy out any competing interests in their Augusta facility.

Read here:

Houston, Texas – April 8, 2014 – Hi-Crush Partners LP HCLP +2.31% (“Hi-Crush” or the “Partnership”) announced today that it has entered into a contribution agreement with Hi-Crush Proppants LLC (the “Sponsor”) to acquire certain equity interests in Hi-Crush Augusta LLC (“Augusta”), the entity that owns the Sponsor’s raw frac sand processing facility located in Augusta, Wisconsin. As previously announced, Hi-Crush acquired a preferred interest in Augusta on January 31, 2013.

“We are delighted to announce this acquisition, which we expect to be immediately accretive,” said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. “With this transaction, we will double the Partnership’s production capacity to 3.2 million tons per year. The Augusta plant has a current capacity of 1.6 million tons of coarse Northern White frac sand per year. Beyond that, we have the capability to expand the Augusta plant by an additional 800,000 tons per year and have started the process to obtain the permits required for this expansion. The expansion will bring total rated capacity at the Partnership to 4 million tons per year. We expect the expanded capacity to come on-line in the second half of 2014.”

Under the terms of the transaction, the Partnership will pay cash consideration of $224.25 million. At the closing of the acquisition, the Partnership’s preferred equity interest in Augusta (currently providing $3.75 million in distributions per quarter) will be converted into common equity interests in Augusta, and the Partnership will own 98% of Augusta’s common equity interests. “We expect that the acquisition of common equity interests in Augusta will contribute more than $30 million of incremental annual EBITDA to the Partnership, before any expansion to the Augusta plant,” said Mr. Rasmus. The acquisition is expected to close by mid-May 2014, subject to regulatory approvals and other closing conditions. In connection with the acquisition, Hi-Crush expects to refinance its existing revolving credit facility.

We need to follow the sand. Where the sand goes, the profits will go also. No buyouts – if these guys enter into a cash offer for my units on my behalf, I’m going to blow a gasket.

These moves are going to double HCLP’s revenue immediately. That will play into the hand of existing investors as bigger operations allow the executives of HCLP to leverage their logistics operations and gain market share.

I’m not even going to look to see if HCLP is paying top dollar premium on this deal – I’ll spare you the time, the answer is “I don’t care.”

This trend in the economy is only growing. These guys survived Aubrey McClendon blowing up the natural gas sector, and together with targeted well services like BAS, they’re going to dominate.

The shares aren’t even phased at the announced dilution yesterday to pay for the acquisition. Have a look.

Here’s the tagline:

HCLP – This Shit Is Going Higher

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HCLP announced another 3 year supply agreement after the close yesterday; this time with US Well Services. Like the other, this agreement locks in US Well Services to purchase a minimum amount of frac sand from HCLP each month.

Per the CEO of HCLP:

“We believe that U.S. Well`s commitment underscores the strength of our extensive logistics network of rail-served terminals in the northeast,” said Robert E. Rasmus, Co-Chief Executive Officer of Hi-Crush. “Certainty of supply is critical in today`s market. Our customers need to have access to high-quality frac sand, when and where they need it, and Hi-Crush provides this certainty.”

I spoke with a gentleman in the comments section of another post on this subject just the very day – he had asked why I don’t love SLCA.

Both HCLP and SLCA are laudable enterprises worthy of a look (and probably a buy). But HCLP’s strategy resonates with me. Their insistence on building their business with logistics in mind – as much as supply deposits – is a distinguishing strength which I respond to.

HCLP is up more than 3% today on the news. This is exactly the kind of activity that will lead HCLP to continue to grow revenues at 100% annually. It’s difficult to put a price on this sort of activity – I’m a believer and think a business like HCLP is still advantageously priced for this growth as opposed to, say, a TSLA.

But I’m also sitting on a mid to high- $20’s cost basis, so take that for what it’s worth.

Next stop, $50.00.

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