Hi-Crush Partners (HCLP) Sees Strong Trading Volume
Hi-Crush Partners LP (NYSE:HCLP) shares saw an uptick in trading volume on Wednesday . 2,776,906 shares were traded during mid-day trading, an increase of 38% from the previous session’s volume of 2,007,951 shares.The stock last traded at $12.55 and had previously closed at $12.55.
A number of research firms recently commented on HCLP. R. F. Lafferty began coverage on Hi-Crush Partners in a report on Wednesday. They issued a “buy” rating and a $23.00 price objective on the stock. Zacks Investment Research upgraded Hi-Crush Partners from a “sell” rating to a “hold” rating in a report on Thursday, February 8th. ValuEngine downgraded Hi-Crush Partners from a “buy” rating to a “hold” rating in a report on Friday, February 2nd. Credit Suisse Group restated an “outperform” rating and issued a $15.00 price objective on shares of Hi-Crush Partners in a report on Tuesday, October 17th. We think HCLP’s decision to return capital to shareholders ($0.15/unit distribution and $100M buyback) is a critical first step in making the frac sand space investable again. After a euphoric start to 2017, capacity addition concerns (generally and specific to Permian basin sand mines) drove significant underperformance in the frac sand space. Investors look out to 2018 and see the significant cash flow generation potential in the sector, but have worried that cash flow would be used to build new capacity, exacerbating current investor concerns. Our view is that similar moves by other leading frac sand companies (with healthy balance sheets and strong free cash flow profiles into 2018) would go a long way toward re-establishing the sector. Finally, UBS Group restated a “buy” rating and issued a $17.00 price objective on shares of Hi-Crush Partners in a report on Saturday, October 21st. The outlook for HCLP has turned more favourable, it reported a 3Q beat, recently announced the reinstatement of its distribution as well as a share buyback, and completed its Kermit facility and Pecos Terminal. Additionally mgmnt guided to 4Q sales volumes in the range of 2.7-2.9MM tons vs. UBSe of 2.6MM tons as it should benefit from the continued ramp of the Kermit facility. We expect HCLPs Propsteam business to continue to be a positive and it noted plans to grow the total number of crews to nine or more from seven by year end. On the pricing front, HCLP noted its expectation for modest improvements through the end of the year. With a 2018 total capex in the range of $35-$45MM and UBSe of more than $100MM of retained DCF, HCLP is 100% self-funded. We look for color on tomorrows call around the features on its credit facility, and hurdles that HCLP needs to pass to allow for the full $100MM of its buyback to be authorized, as well as how we should be thinking about the timing of the buyback. Four analysts have rated the stock with a hold rating and fourteen have issued a buy rating to the stock. Hi-Crush Partners currently has an average rating of “Buy” and an average target price of $17.07.
The company has a current ratio of 1.77, a quick ratio of 1.29 and a debt-to-equity ratio of 0.24. The stock has a market cap of $1,140.00, a price-to-earnings ratio of 39.22 and a beta of 1.04.
Hi-Crush Partners declared that its Board of Directors has approved a stock repurchase plan on Tuesday, October 17th that authorizes the company to buyback $100.00 million in outstanding shares. This buyback authorization authorizes the basic materials company to reacquire shares of its stock through open market purchases. Stock buyback plans are usually an indication that the company’s leadership believes its stock is undervalued.
A number of hedge funds have recently made changes to their positions in the business. ING Groep NV grew its holdings in Hi-Crush Partners by 72.6% during the third quarter. ING Groep NV now owns 2,400,552 shares of the basic materials company’s stock valued at $22,805,000 after purchasing an additional 1,010,000 shares during the last quarter. Ninepoint Partners LP acquired a new position in Hi-Crush Partners during the third quarter valued at approximately $15,200,000. Clear Harbor Asset Management LLC boosted its position in shares of Hi-Crush Partners by 32.8% in the fourth quarter. Clear Harbor Asset Management LLC now owns 1,057,356 shares of the basic materials company’s stock valued at $11,314,000 after acquiring an additional 261,219 shares during the period. Brightline Capital Management LLC bought a new stake in shares of Hi-Crush Partners in the fourth quarter valued at approximately $5,618,000. Finally, Guggenheim Capital LLC boosted its position in shares of Hi-Crush Partners by 167.4% in the fourth quarter. Guggenheim Capital LLC now owns 323,399 shares of the basic materials company’s stock valued at $3,461,000 after acquiring an additional 202,447 shares during the period. Institutional investors own 40.98% of the company’s stock.
About Hi-Crush Partners
Hi-Crush Partners LP is an integrated producer, transporter, marketer and distributor of monocrystalline sand, a specialized mineral that is used as a proppant to manage the recovery rates of hydrocarbons from oil and natural gas wells. Its reserves consist of northern white sand, a resource in Wisconsin and limited portions of the upper Midwest region of the United States.
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