Smart Sand Afflicted by Low-Cost Sand Supply Flood
Smart Sand had a solid third quarter, as overall contribution margin increased 25% sequentially despite a 2% fall in volumes sold due to margins per ton increasing to $33 per ton from $26 previously. For now, our fair value estimate and no-moat rating remain unchanged.Although the weakening of Smart Sand's volumes reflect impact from industry headwinds, the company's pricing and margins remained resilient owing to most of its volumes being sold via long-term oil-price-linked contracts. Therefor...
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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