Seeking Alpha

Boom for fracking sand suppliers means gold for investors

  • "Sand is the new gold," as share prices surge for U.S. companies which supply sand to energy producers in response to the growing use of fracking to extract oil and natural gas from shale formations.
  • U.S. Silica (SLCA -0.4%), the biggest producer, has posted 52-week highs in nine of the past 10 trading sessions and has more than doubled YTD; Emerge Energy (EMES +0.9%) and Hi-Crush Partners (HCLP +2.7%) have posted respective YTD gains of 218% and 78%.
  • Demand for fracking sand next year will be 96% higher than in 2015, with shortages continuing for years, Morgan Stanley analyst Ole Storer predicts in raising his 12-month price target for SLCA to $80.
Comments (21)
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    Yep. ANd they said the same about iron ore a few years ago too. This will bust wide open in a year or less.
    29 Aug, 10:42 AM Reply Like
  • Factzplz
    , contributor
    Comments (229) | Send Message
     
    For $65 a ton for sand, which yields 30%-50% more oil per well, you really think that drillers will stop using sand?

     

    Or, perhaps if semi trucks are electric then we will not need oil (trucks use 60% of our oil), then, of course we will not need as much sand.

     

    But until then, EMES still will double+ from here as it is in negotiations to acquire 4 other mines, plus one major acquisition. EMES sales were 2.5 million tons in 2013 and that will exceed 12 million tons in 2015 - plus the 10% price increase, its profits, and dividend should be huge.

     

    I would suggest to do some research, then make an informed investment decision.

     

    VERY long EMES, and SLCA, ABCAF, and ABHD as a play on cleaning up fracking water
    29 Aug, 11:03 AM Reply Like
  • dux20
    , contributor
    Comments (29) | Send Message
     
    Its strong secular trends that produce growth for extended periods of time. Fracking sand is in such an uptrend. Iron ore isn't! Its just that simple! We're still in the early innings of this game. Hang on for a very nice ride!!!
    29 Aug, 12:01 PM Reply Like
  • T-time
    , contributor
    Comments (312) | Send Message
     
    I was disappointed in ABCAF - they finally got the approval and it did little to the stock other than erase 3 months of losses. I am thinking it will be a long time to materialize to the level of SLCA or HCLP. Have been long SLCA since Feb with 140% return... In and out of EMES and HCLP but I am more concerned with MLP's over taxes - over 40% for EMES... or so I was told... Thinking HCLP will start to run now (again), ran well early in the year but has been flat last few months - until this week...
    29 Aug, 12:11 PM Reply Like
  • 45Cal
    , contributor
    Comments (58) | Send Message
     
    LOL...apples & oranges nasdaq99. Please do your homework.
    30 Aug, 02:56 AM Reply Like
  • Nostradavis
    , contributor
    Comments (143) | Send Message
     
    This of course relates because, they use iron ore in fracking?
    2 Sep, 01:09 AM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    Let's see. The day this blurb was posted SLCA was $72. Today it's $50. Golly gee bum wizz, maybe somebody went to the beach on vacation, came back, looked at the pictures and discovered there was SAND all along the seashore............
    8 Oct, 10:34 AM Reply Like
  • 27975573
    , contributor
    Comments (289) | Send Message
     
    nasdaq99......

     

    you may be right.....but until then....ride this train.

     

    Long HCLP, SLCA, ABCAF

     

    Speaking of trains.....the rails are carrying all this stuff; whether it be iron ore,
    sand, coal, or crude oil.

     

    Long CSX

     

    ....and the rail car makers as well....GBX, TRN, RAIL
    29 Aug, 10:48 AM Reply Like
  • mhanley
    , contributor
    Comments (43) | Send Message
     
    Thanks to Todd Johnson and his SA article in June 2013, I am sitting on a bunch of shares bought at an average cost of $18.28 and loving life. Yield on original investment now is 25.6%!
    29 Aug, 10:50 AM Reply Like
  • efactor
    , contributor
    Comments (387) | Send Message
     
    mhanley, I wish I would have seen that article! I envy you. You are sitting on a sand mine LOL. Sand is the new gold. It sure looks like EMES will be one of the best investments over the next ten years.
    29 Aug, 11:45 AM Reply Like
  • 45Cal
    , contributor
    Comments (58) | Send Message
     
    I'm up 71%, stay long & buy in the dips!
    30 Aug, 03:09 AM Reply Like
  • 45Cal
    , contributor
    Comments (58) | Send Message
     
    I think HCLP will have a better run.
    30 Aug, 03:12 AM Reply Like
  • sbrock33
    , contributor
    Comment (1) | Send Message
     
    US Silica is not the biggest producer. They are 4th or 5th in terms of tons sold.
    29 Aug, 11:32 AM Reply Like
  • T-time
    , contributor
    Comments (312) | Send Message
     
    For fracking perhaps, but considering all uses they are biggest
    29 Aug, 12:12 PM Reply Like
  • Nostradavis
    , contributor
    Comments (143) | Send Message
     
    And not all major sand distributors are publicly traded.
    2 Sep, 01:09 AM Reply Like
  • efactor
    , contributor
    Comments (387) | Send Message
     
    I bought EMES less than two weeks ago, and it's already up 23%. The stock is up close to 600% since IPO in May 2013. The current valuation is good, the company has very experienced management, is more than just a sand supplier, and poised to outperform for the next ten years. Ride the momentum, or regret the decision.
    29 Aug, 11:37 AM Reply Like
  • Bbloomlu
    , contributor
    Comments (247) | Send Message
     
    I think the author is a little late to the dance! Already have better than a double on HCLP.
    29 Aug, 12:10 PM Reply Like
  • g8trgr8t
    , contributor
    Comments (583) | Send Message
     
    SLCA and HCLP have been very good to me. Just added 20k shares of ABCAF for the long term. The ROR on the extra sand is going to push all the drillers to use the additional proppant. Nowhere to go but up
    29 Aug, 12:41 PM Reply Like
  • 27975573
    , contributor
    Comments (289) | Send Message
     
    Agreed g8trg8t......

     

    .....and now that the Chinese have added the $1.2 Billion they promised
    in Athabasca. The activity around the discoveries of lighter crude in the area
    will propel business for ABCAF!!
    2 Sep, 11:16 AM Reply Like
  • machiavelli
    , contributor
    Comments (515) | Send Message
     
    Michael Filloon (great researcher and writer) turned me onto SLCA with a good article just over a year ago. I still own SLCA after x2 gains in that time but I see more upside yet. will likely sell in Oct if things get volatile (if I don't get too greedy). it felt really good to watch SLCA rise over the last months.
    29 Aug, 04:03 PM Reply Like
  • San Fran Bio Investor
    , contributor
    Comments (7) | Send Message
     
    Check out the out performance of $EMES vs $HCLP since March. Have to believe $HCLP tries to play catch up soon. http://stks.co/p0jIa EMES has gotten the Cramer nod with the CEO making 2 appearances the past 2 months on Mad Money. HCLP has lagged EMES even though it is more of a pure play on sand. 2'nd Quarter sand revenues for HCLP were $83 Million compared to $77 million for EMES. Considering the exposure EMES has gotten I think today HCLP is the better valuation play for a catch up to EMES. I own both but slowing selling EMES and slowly adding to HCLP.
    1 Sep, 12:21 PM Reply Like
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