Buy Emerge Energy on price dip as fundamentals intact, Wunderlich says


Emerge Energy Services (EMES +2.3%) slumped nearly 13% after it announced a 3.5M-unit secondary offering, but Wunderlich believes the pullback is overdone and presents an attractive buying opportunity, as EMES fundamentals remain solid (Briefing.com).

The issuance should not impact the stock, as the number of outstanding common units will remain unchanged, the firm adds.

Wunderlich also notes the relative valuation of EMES vs. peer Hi-Crush Partners (HCLP -3.2%), which trades at a significant premium to EMES.

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Comments (13)
  • Bbloomlu
    , contributor
    Comments (312) | Send Message
     
    Just checked Scottrade. HCLP p/e 23 EMES p/e 44 how does those numbers correlate this report
    1 Jul 2014, 01:17 PM Reply Like
  • T-time
    , contributor
    Comments (998) | Send Message
     
    Emerge energy has a PE of 54, while HCLP has a PE of 13 - and this is trading at a significant premium?
    1 Jul 2014, 01:17 PM Reply Like
  • T-time
    , contributor
    Comments (998) | Send Message
     
    EMES has a PE of 54, and HCLP a PE of 13 - and that is a significant premium??
    1 Jul 2014, 01:51 PM Reply Like
  • 27975573
    , contributor
    Comments (399) | Send Message
     
    I would not chase either of these high flyers; there will be a natural pull-back.
    That is just how the market works.........

     

    Check out ABCAF as another play on frac sand....
    1 Jul 2014, 02:37 PM Reply Like
  • Factzplz
    , contributor
    Comments (309) | Send Message
     
    EMES profit will double this year, and triple from 2013 in 2015, with the dividend going to $8 by year end, and $12-$14 in 2015.

     

    If you want to assume a 6% yield on EMES, then $12 / 6% = $200

     

    THAT is why EMES is a bargain at today's price.

     

    See my previous posts for the story, or check the 10Qs of the three players and conference calls yourself.
    1 Jul 2014, 03:30 PM Reply Like
  • mydogmoe
    , contributor
    Comments (1430) | Send Message
     
    I agree with 27975573. Love the stock fundamentally but is a little too hot to handle right now. High grade sand for fracking is driving the high multiple. Think it is a good idea to check out ABCAF. Will add to a watch list...
    1 Jul 2014, 06:24 PM Reply Like
  • 27975573
    , contributor
    Comments (399) | Send Message
     
    Thanks for the agreement 'mydogmoe'

     

    My point is about diversification.
    We all can still make some money on the big three; just
    not at the rates we have been enjoying.

     

    Again I urge all to check out ABCAF.

     

    Good investing to all!!
    2 Jul 2014, 10:39 AM Reply Like
  • Caterer
    , contributor
    Comments (34) | Send Message
     
    I agree with Factzplz. The doubling from here hinges to a large extend on bringing the two new dry plants on line by the end of 4Q. However, management has been quite terse in terms of disclosing the details and progress. Competitors, meanwhile, have been quite open in term of disclosing the details of the plant expansion - location, status of permitting, etc.. I wonder If Factzplz has some thoughts or insights into this matter. Thanks
    1 Jul 2014, 09:38 PM Reply Like
  • tradindave
    , contributor
    Comments (6) | Send Message
     
    Management has consistently over-delivered every quarter and the recently disclosed Schluberger deal fleshes out the extraordinary demand increases--they'll take the entire production of a new mine. Current yield 5% and at least doubling, I can get paid for enduring a little volatility.
    2 Jul 2014, 09:16 AM Reply Like
  • captainron192
    , contributor
    Comments (2) | Send Message
     
    Energy independence is the future; natural gas is the future of energy. Fracking will not be done to it's greatest potential without proppants. EMES and HCLP will continue to do very well as they ramp up production. Expect price increases due to high demand of a limited product. EMES is reported to be doubling their rail car inventiory within a year to accomodate increased sales. CapEX of this magnitude are a strong signal of confidence plus a nice dividend too!
    2 Jul 2014, 05:56 PM Reply Like
  • 27975573
    , contributor
    Comments (399) | Send Message
     
    Yes. However, I am diversifying....I have been caught being to long before....Moving some frac money to (OTCPK:ABCAF)...sandthen some to (CSX) to move it where it needs to be.
    3 Jul 2014, 09:47 AM Reply Like
  • harball
    , contributor
    Comments (438) | Send Message
     
    If folks are buying Athabasca Minerals, be sure to check out Claim Post Resources, too. This is essentially an undiscovered frac sand project developer much like ABM but based in Manitoba. They are in fact ahead of the curve compared to ABM and their projected output volumes are comparable. The difference is that ABM has a small but profitable aggregates mining operation which can partly fund he capex for frac sand. CPS meanwhile is trading at a c$ 15m valuation while ABM is c$100m+.
    10 Jul 2014, 01:03 PM Reply Like
  • 27975573
    , contributor
    Comments (399) | Send Message
     
    Checked out....Claim Post

     

    Did not like the hype and run-up since it went on the OTC boards.
    I want a longer track record .....
    Will watch though.
    10 Jul 2014, 07:03 PM Reply Like
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