Hi-Crush Partners LP (HCLP)

Hurt by the fall in oil prices and the decreased activity level. However, they still have long-term contracts with most of their customers. A lot of those contracts are below the spot price. Even though we are seeing a slower environment, because their contracts are “take and pay” their revenue outlook for the next year to 18 months is still pretty solid. It’s not going to be in favour for a bit until we see the next ramp up in production. Yield is relatively safe. He would be very, very comfortable holding this one here.

(A Top Pick Oct 14/14. Down 12.34%.) In North America, with all of the shale oil revolution that is going on, all of the latest completion technologies are moving to silica frac sand completion technology. There are only 3 main players in that space and this is one of them. Although there is a slowdown right now, once we get through the bottom end of this oil market and back up, we are going to see activity levels back up. Terrific growth story.

(A Top Pick Oct 14/14. Down 33.93%.) This is frac sand, so has been virtually crushed. Oil was at about $75 at that time and if it had found a bottom in the $70s, drilling activities for this year and next would still be there. Drilling activities are going to be greatly reduced in early 2015. Waiting for the new year to potentially add to his holdings. A very well-run company.

Manufactures fracing sand. Looked like it started to base a couple of weeks ago, but has been weak again in the last few days. If you are happy with a 5% plus yield, you can step in and comfortably buy it here. Because it is a limited US partnership, there is a very hefty 40% withholding tax. They have the ability in the partnership to drop down other assets into the partnership from the parent company. He is looking at possible dividend increases again next year. Yield of 5.4%.

There are 3 major players in the US in frac sand and this is one of them. They have all been down in the last 3 months. This one is now at 10X next years earnings. It is going to grow its earnings at about 35%-40% over the next 2 to 3 years. Basically every shale oil or gas well that is ever drilled has a 60% decline ratio in its 1^st year. In order to keep production flat, they must drill a bunch of wells. The growth rate of the use of frac sand is going up. This is a high growth play, and an interesting way to invest in energy.

Produces frack sand. Has done phenomenally well. Frack sand prices are going up. It went from 15 to 75 rail cars of sand per oil well drilled. This is why frack sand prices are running.

Came out of nowhere. Fracking play. High quality sand. The valuation does not make any sense. This is a thematic, a one trick pony type of company. It makes him nervous. Prefers oil and gas producers.

This has been one of the big winners for his portfolio. They mine fracing sand in Wisconsin. This is a limited partnership, so it pays out at fairly high distribution of cash. There are some issues for Canadians owning US limited partnerships with respect to withholding tax. Still lots of growth ahead. Trading at about 15X next year’s earnings. Increased their distribution each year for the past 2 years. 3.5% dividend yield.

Produce and sell frac sand and cash flows are amazing. Had recommended this in 2012 at around $21 and the stock started immediately to drift down. They announced a loss of a contract, which hurt their credibility, so he sold his holdings. At this point, he thinks you have missed it.

(A Top Pick Dec 6/12. Up 144.49%.) This company mines sand that is used in Fracing. With all the natural gas exploration in the US, their product has been in very, very high demand. Now have 25 customers instead of 3 that they formerly had. Market Outlook still remains very positive. They’ll earn somewhere around $2.15 or so this year. Trading at about 15X this year’s earnings. Yield of about 6.5%.

Natural sand used in fracking industry. Units spun out last August. Announced last quarter that 20% of customers cancelled contracts. Feels they can replace the lost business.

Produce frac sand for the drillers. When companies do horizontal drilling into shale rock, you go down deep, go across and then you have to fracture that reservoir in order to get the gas/oil to flow back up the well. They pump water, chemicals and frac sand. The sand will hold the fractures open but it has to be permeable. Sand fetches a couple of hundred dollars a ton. There is a lot of it available but not near a railroad like this one.