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SND- Smart Sand


muscleman
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I'll be brief on the my thoughts.

1. Last quarter 0.17 eps is 0.1 above estimates.

2. If WTI stays above $55, then they can get an extra $5 per ton according to their contracts, which translates to an additional 0.07 eps.

3. Oil prices seems to be firming up after the debacle in 2014, and frac needs more and more sands.

4. Their new facility will finish construction in 2018 Q1 and their revenue should double.

5. Strong balance sheet.

6. Three year take or pay contracts ensures if oil price takes a temporary dive, they can still earn a reasonable amount of money.

 

I think if oil price stays above 55, and their new facility completes in time, they can make $2 eps in 2018.

 

Caveat:

1. There is a lot of concerns regarding over-supply as a number of players enter the sand production market. SND believes the supply would still not be able to meet demand, which they project to grow by 37% a year for the next few years, and their unique White Northern sand has higher quality than the Permian basin sand.

2. If I am wrong about oil prices, and oil prices goes down, SND may be in trouble.

 

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