Sand Company Stock Booms on fracking (article 29 Aug)Shares of US sand suppliers to energy producers are surging in response to the growing use of fracking.
Emerge Energy, a Southlake, Texas-based partnership that made its initial public offering at $17 a share, changed hands for more than $140 yesterday. Hi-Crush, based in Houston, and US Silica, based in Frederick, Maryland, more than tripled during the past 15 months.
“Sand is the new gold,” Ivaylo Ivanov, founder of Ivanhoff Capital, wrote yesterday in a blog posting similar data. The San Diego-based investor favored Hi-Crush, whose shares were rebounding after pulling back from a record reached on July 22.
Demand for fracking sand in 2016 will be almost double last year’s level, Ole Slorer, a New York-based analyst at Morgan Stanley, wrote two days ago in a report. He expects shortages for years, with supplies in 2016 trailing demand by 10%.
Slorer raised his 12-month price estimate for US Silica by 36%, to $80, and wrote that the stock may reach $95. US Silica traded yesterday at a record $71.29 and closed at $70.72, up 4%. Emerge Energy, whose main business is fuel processing and distribution, rose 2.6%. Hi-Crush added 3.2 %.