Hi-Crush Partners LP (HCLP)
I absolutely love Hi-Crush Partners LP (HCLP) as a long-term investment. The company provides sand as a service, and its main "often over-looked commodity" has tremendous value and use for the oil fracking industry.
In the company's own words, "Hi-Crush Partners LP is a strategic provider of proppant and logistics solutions to the North American petroleum industry. We own and operate multiple frac sand mining facilities and in-basin terminals, and provide mine-to-wellsite logistics services that optimize proppant supply to customers in all major basins." Essentially, fracking requires an excessive amount of sand, and the petroleum industry is made more efficient and more profitable by the use of Hi-Crush Partners' very specific, industry-leading sand mining and delivery services.
Shares of Hi-Crush Partners have been falling from $16.65 eight months ago and are now showing signs of bottoming out near $3.50 to $4.00. Yet, the financial trends are suggesting that this company will continue to hold a very special place in the eyes of most oil well companies.
In 2016, top-line revenues came in at $204 million. In 2017, that same metric leapt up to $602 million, which brings us to $843 million in 2018. In fact, 2018 also had a net profit of $141 million, enough to buy a pretty cool sandbox for the kids of the CEO!
Looking at the quarterly results, the company typically produces encouraging profits. Last quarter, Hi-Crush Partners did have a rare loss of just under $10 million over the period. However, this is not at all a concern given the big picture, especially once you look at the balance sheet, which shows $1.43 billion in assets covering $626 million in liabilities.
