Increasing Our FVEs for Frac Sand Companies Owing to Higher Demand Outlook
We are increasing our fair value estimates for the proppant producers we cover following an update to our frac sand outlook. U.S. Silica moves to $31 per share from $26.50, Hi-Crush Partners to $13.50 per unit from $10, Fairmount Santrol to $4.50 per share from $3.75, and Smart Sand to $8.25 per share from $6.50. Overall, the higher valuations are a result of a higher proppant demand forecast, somewhat offset by increased forecasts for low-cost regional sand supply. Each of these companies still...U.S. Silica Holdings is a holding company. Through its subsidiaries, the company is a performance materials company and a producer of commercial silica used in industrial applications and in the oil and gas industry. The company is also engaged in the production of products derived from diatomaceous earth, perlite, engineered clays, and non-activated clays. The company's segments include: Oil and Gas Proppants, which serves the oil and gas recovery market by providing and delivering fracturing sand; and Industrial and Specialty Products, which provides products and materials for building and construction products, fillers and extenders, filtration, glassmaking, absorbents, foundry, and sports and recreation.
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