Fairmount Santrol Holdings’ YTD returns
Fairmount Santrol Holdings’ (FMSA) YTD (year-to-date) returns are -18.9% as of March 14, 2018. YTD, Fairmount Santrol Holdings has underperformed the US rig count (up 6%), West Texas Intermediate crude oil (1% higher), and the SPDR S&P Oil & Gas Equipment & Services ETF (XES) (10% down). XES tracks an index comprised of companies in the US oilfield equipment and services industry. So far in 2018, Fairmount Santrol Holdings has underperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) (down 7.1%). XOP tracks an index of companies in the US energy space.
Fairmount Santrol Holdings’ stock price was at its YTD minimum of $6.58 on January 2. Since then, the stock price improved until the last week of January and then declined.
Fairmount Santrol Holdings’ performance in 2017
Fairmount Santrol Holdings’ revenues increased 79% in 2017—compared to 2016. In 2017, the company’s reported net income was $53.8 million—compared to a net loss of $140.2 million in 2016. Higher earnings in 2017 were driven by a greater demand for proppants in 2017, higher pricing for Fairmount Santrol Holdings’ offerings, and greater sales of higher priced value-added products. Fairmount Santrol Holdings’ FCF (free cash flow) turned positive in 2017, while its net debt fell 4% compared to 2016.
Despite improved revenues, higher earnings, a better FCF, and a lower debt level have caused Fairmount Santrol Holdings’ stock price to weaken in 2018. In December 2017, Fairmount Santrol Holdings announced a merger agreement with Unimin. Unimin provides mining and mineral processing facilities in the US and other countries. The transaction is expected to close in mid-2018. Investors’ sentiment about the merger could have led to Fairmount Santrol Holdings’ underperformance in the stock market.
Next, we’ll compare U.S. Silica Holdings’ (SLCA) YTD returns with market indicators. We’ll also analyze U.S. Silica Holdings’ fundamental metrics.