Editor’s note: This column is the latest update in our Best Stocks for 2014 contest. Jon Markman’s pick for the contest is Emerge Energy Services LP (EMES).
Last December, I brought to your attention Emerge Energy Services LP (EMES) as my pick in the Best Stocks for 2014 contest.
EMES, which mines specialized sand that is used in oil shale fracking, is an independent oil and gas services company I like with a very unique business model. Since that time, shares of the upstart EMES have continued to shine, up 27% year-to-date.
Emerge Energy Services made its public debut in May 2013 as a diversified energy MLP operating in two very distinct segments of the industry: Sand Production and Fuel Processing and Distribution (FP&D).
The firm announced its 2013 earnings results a few weeks ago, completing its first full year as a public company, and giving investors, if you can believe it, even more optimism for the future. Both of EMES’ two operating divisions have exhibited spectacular growth this past year, and despite double digit (even triple digit growth the sand production segment), neither can fully keep up with customer demand.
EMES’ sand production unit, which produces specialized silica sand used in the hydraulic fracturing process, has more than doubled its customer base while growing revenues 152% during the year. It’s already the leading manufacturer of Northern White silica sand, yet to keep up with demand, the firm is already in the process of securing permits for two new facilities.
Meanwhile, the fuel processing and distribution segment continues to grow at an exceptional rate as well, with three new transload sites and nearly 3,000 additional rail cars on order for delivery over the next 12 months.
EMES’ first full public year was a phenomenal one, with total revenues up 40% from a year ago, while net income climbed 105%!
As a result it was able to declare a distribution of $1.00 per unit for the fourth quarter, a 16% jump from the previous quarter, and a 61% increase over the initial guidance from the prospectus.
Emerge Energy Services remains an unconventional way to to take advantage of the growth in the explosive shale formation fracturing process, so don’t miss out.