In the last 3 months, 12 ranked analysts set 12-month price targets for HCLP. The average price target among the analysts is $8.00. The 12 valuations range from $5.00 to $14.00 per unit.
The most recent report submitted to Reuters is from Jaime Perez at R.F. Lafferty on 12/4/2018. He rates HCLP a BUY with a valuation of $10.00. Note that the date of the report is the same as the date of the most recent conference that Hi-Crush spoke at.
Hi-Crush announced Q3 results on 10/30/2018. IMO only the analysts reports submitted to Reuters after that date are valid.
> 8 reports were submitted after 10/30 with valuations of $5 to $10. Recommendations were: 3 SELL, 3 HOLD and 2 BUY.
> The two most recent reports (11/6 from B Riley FBR and 12/4) rate HCLP a BUY with $10 valuations.
> All twelve reports included in Reuters / First Call's forecasts and target price estimates show Hi-Crush earnings positive in 2019.
Hi-Crush Update - Dec 13
Hi-Crush Update - Dec 13
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hi-Crush Update - Dec 13
I spent Thursday afternoon and this morning working on HCLP. I have posted my updated profile and forecast/valuation model to the EPG website.
The frac sand business is a lot like the onshore drilling rig business. If fact, the same supply/demand fundamentals have a big impact on these "niche companies". There are only a handful of onshore drilling companies that control over 80% of the rig market. When demand for rigs goes down the smaller companies go out of business, but the large-caps like HP and PTEN survive and actually gain market share. I think the frac sand business will be the same; the strong companies will survive and gain market share.
You can count the large (well capitalized) frac sand companies on one hand. Lots of new sand companies, especially in Texas, were announced in the last two years. Many of them will not survive, but Hi-Crush will.
I like the conversion to a C-Corp., but the confusion surrounding the deal and the sharp drop in frac sand prices has caused yield investors to dump HCLP.
Assuming the dip in well completions is temporary, HCLP is now at an attractive price if your investment time horizon is longer than six months.
I think expansion of their Kermit, Texas sand mind and the long-term supply contract with Chesapeake Energy are two very positive announcements that have been totally ignored by the market.
The frac sand business is a lot like the onshore drilling rig business. If fact, the same supply/demand fundamentals have a big impact on these "niche companies". There are only a handful of onshore drilling companies that control over 80% of the rig market. When demand for rigs goes down the smaller companies go out of business, but the large-caps like HP and PTEN survive and actually gain market share. I think the frac sand business will be the same; the strong companies will survive and gain market share.
You can count the large (well capitalized) frac sand companies on one hand. Lots of new sand companies, especially in Texas, were announced in the last two years. Many of them will not survive, but Hi-Crush will.
I like the conversion to a C-Corp., but the confusion surrounding the deal and the sharp drop in frac sand prices has caused yield investors to dump HCLP.
Assuming the dip in well completions is temporary, HCLP is now at an attractive price if your investment time horizon is longer than six months.
I think expansion of their Kermit, Texas sand mind and the long-term supply contract with Chesapeake Energy are two very positive announcements that have been totally ignored by the market.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group