Hi-Crush Partners LP (HCLP) Selloff Might Be Result Of Portfolio Rebalancing

Hi-Crush Partners LP (NYSE:HCLP) has been downgraded by R. F. Lafferty on January 07 which now rates the stock as Hold compared with Buy rating suggested in the past. Analysts at Cantor Fitzgerald, shed their positive views on December 19 by lowering it fromNeutral to Underweight. The stock lost favor of Jefferies analysts who expressed their lack of confidence in it using a downgrade from Hold to Underperform on October 17. Johnson Rice analysts came out with bearish views on October 03 when the call was made. They think the stock is now Hold compared to to their prior call for Accumulate.

HCLP stock dropped -0.23% in recent trade and currently has a stock-market value of $445.26M. The shares finished at $4.29, after trading as low as $4.25 earlier in the session. It hit an intraday high Thursday at $4.49. Trading activity significantly improved as the volume at ready counter increased to 824,375 shares versus 758,550 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,193,170 shares. The stock is now 34.48% above against its bear-market low of $3.19 on December 24, 2018. It has retreated -288.11% since it’s 52-week high of $16.65 reached in July. Now the market price is down -66.61% on the year and up 19.83% YTD.

Wall Street’s most bullish Hi-Crush Partners LP (NYSE:HCLP) analysts are predicting the share price to blow past $6 per share during the next 12 months. The current median share price forecast by them is $3.75, suggesting that the stock could increase -12.59% in that time frame. The average price target of $4.06 calls for a nearly -5.36% increase in the stock price.

Hi-Crush Partners LP (HCLP)’s 50 day simple moving average (SMA 50) price is $4.11 and its 200-day simple moving average (SMA 200) price is $8.65. The company’s stock currently has a total float of 90.46M shares. Its weekly volatility is hovering around 5.53% and felt 5.34% volatility in price over a month. On the upside, the share price will test short term resistance at around $4.44. On a downside, the stock is likely to find some support, which begins at $4.2. The failure to get near-term support could push it to $4.1.

When looking at valuations, Hi-Crush Partners LP (HCLP) has a cheap P/E of 2.89x as compared to industry average of 3509.63x. Moreover, it trades for 10.72 times the next 12 months of expected earnings. Also, it is trading at rather inexpensive levels at just over 0.52x price/book and 0.53x price/sales. Compared to others, Hi-Crush Partners LP is in a different league with regards to profitability, having net margins of 15.8%. To put some perspective around this, the industry’s average net margin is 2.92%. HCLP’s ROE is 16.1%, which is also considerably better than the industry’s ROE of 1.24%. It’s also very liquid in the near term, with a current ratio of 1.8. The stock has a debt/capital of 0.55.

Shares of HCLP have dropped -4% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Hi-Crush Partners LP (NYSE:HCLP) has topped consensus earnings estimates in 3 quarters (25%), missed earnings in 8 quarters (66%), whereas at 1 occasion EPS met analyst expectations. Revenue for the recent quarter stood at $162.24 million, down -25% on last year and above the $147.29 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $146.61 million to $202 million, which should be compared with $229.83 million generated last year. EPS is seen in a range of -$0.11 to $0.04, against the $0.55 reported a year ago.