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...Smart Sand is a frac sand supply and services company. The company is a producer of Northern White raw frac sand, which is a proppant used to improve hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The company also provides proppant logistics solutions to its customers through its in-basin transloading terminal and wellsite storage capabilities. The company markets its products and services primarily to oil and natural gas exploration and production companies and oilfield service companies and sells its products under a combination of long-term take-or-pay contracts and spot sales in the open market.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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