Reassessment of New Frac Sand Supply Additions Leads to Lower Proppant Company FVEs
We are lowering our fair value estimates for all proppant companies under our coverage. U.S. Silica moves from $32 per share to $24.50, Fairmount Santrol from $3.75 to $2.25, Smart Sand from $13 to $8, and Hi-Crush from $15.50 to $11. At current share prices, this means we now view U.S. Silica and Fairmount as overvalued, and Hi-Crush and Smart Sand as close to fairly valued, although still trading at below our fair value estimates. Additionally, we have widened our uncertainty ratings for Hi-Cr...Fairmount Santrol Holdings is a provider of sand-based proppant solutions used by exploration and production companies for their oil and gas wells. The company also provides sand-based products to end users in the industrial and recreational products (I&R) markets. The company is organized into two segments: proppant solutions and I&R. The proppant solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the U.S. and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. The I&R segment provides raw, coated and blended sands to the foundry, building products, glass, turf and landscape and filtration industries primarily in North America.
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