by takeprofits | January 4, 2017 1:02 pm
[ed. note: Travis is passing the keyboard to Myron Martin for a quick note today — Myron has usually focused on researching junior mining stocks for the Irregulars, but he sent in this teaser solution that he thought more readers would like to investigate. We have not looked into the stock being teased beyond what Myron writes below, but feel free to join the discussion with a comment if you have an opinion. Thanks for reading!]
I read Keith Schafer’s bulletins regularly because I consider him one of the most knowledgeable oil[1] and gas analysts in the business—a straight shooter who has made millions in that business. I know Keith and have met and talked with him on several occasions and trust him as honest and sincere. If and when I have enough capital to diversify into oil and gas big time as he does, justifying investing in his service, I will probably do so. I agree with Keith that oil and gas companies with good acreage in the Permian Basin are the current profit centre for energy.
As he notes in his latest teaser ad[2]:
This company is a direct bet that the Permian Basin in Texas will be the most active place for drilling in the country. There is no doubt that the oil industry will make Swiss cheese out of the Permian – drilling thousands of wells.
That’s because the Permian Basin is by far the most profitable oil play – in the whole western world, really.
This promo is my real centre of interest because Keith has been running a similar ad for several months now that sent me on a “wild goose chase” looking for a small company with huge drilling potential in the Permian, where I myself owned several stocks that have done well. I don’t consider it a waste of time because I have found some interesting stocks I will report on in future. However, about half way through Keith’s promo for his newsletter I realized that while I had not found a perfect fit for his Permian based stock, since the election of Trump he has added more clues and now calls his micro cap play in effect his “TRUMP CARD” that a Trump presidency can turn into another ten bagger like his previous wins in the sector.
He says:
Trump’s energy plan is so simple. It involves a lot less red tape… And a lot more drilling. President Trump wants to unleash the full potential of the American shale industry.
Trump has laid out 7 key elements in his “America First Energy Plan”. Every one of them is tied to the exact same theme. The United States is going to drill for oil like there is no tomorrow. That creates The Trump Opportunity.
You really need to listen to his video in full to get the whole story so when I disclose the name of the company he is touting you will be able to check my research to verify I have identified the company correctly. Actually, as soon as he mentioned “frac sand” (a new clue added since earlier versions) I knew what company he was touting:
I’m still not bullish on oil prices. But I am bullish on another commodity. It is a commodity that is closely related to the oil business…That commodity is sand—as in fracking[3] sand. A very specific type of sand that is not found in many locations.
This sand is the single most important ingredient in getting oil out of shale rocks…Frac sand is a commodity that is going to see explosive demand over the next 10 years….
My Micro-cap Trump Opportunity has more going for it than just being in the right industry. It has the most highly coveted type of sand…the very best sand to use.
In fact I already owned the stock based on my own research. Keith boasts about doing a lot of fundamental research, spending a great deal of time and money, and I can say the same, the difference being his is focussed on energy and mine on metals.
Keith ties it back to the location here:
This frack sand company not only has the best sand—it has the best location. Almost ALL frac sand used in the Permian comes from… Wisconsin. That may as well be The North Pole. My Micro-cap Trump Opportunity can beat every competitor when it comes to cost—because it’s A LOT closer to the Permian.
The company in question is Select Sands Corp. (SNS.V, SLSDF). Here is a press release[4] that covers the essence of the company’s situation that fits all the clues given in Keith’s promo. I recommend that in doing your own due diligence you check out their website and read other recent press releases.
As per agreement, I will not trade in this stock for at least 72 hrs after this appears in print so you have an opportunity to grab some shares before I increase my stake. With Keith’s considerable following, the stock is bound to rise as the company ramps up production and becomes better known. With a micro cap like this that is still more of a speculation than an investment, I recommend that you put no more than 1% of your available capital into this stock initially. Build your position progressively as the company ramps up production and sales through the next year, so that concentrated buying does not drive up the price to an unsustainable level ahead of the fundamentals of the company’s natural growth.
Source URL: https://www.stockgumshoe.com/reviews/oil-gas-investments-bulletin/2017-no-brainer-trump-presidency-pick/
Copyright ©2024 Stock Gumshoe unless otherwise noted.
With oil prices still drooping, Martin, any change of your opinion on SLSDF (Select Sands), which you touted early this year?
Does anyone else feel like this stock was talked up big time then ghosted? Over a year since an update. Was lauded at 3x current price level, and while most important (for a startup) milestones were plans only. Many of those milestones have been realized so what’s up with the silence? Cashed in after the fast price rise and moved on? Not exactly what I’m accustomed to from SG. Any others feel similarly? Am I missing something?
Funguy
This was a Stock Gumshoe pick? I didn’t think Travis made picks……
He does have a portfolio of his person holdings that he keeps us updated on but I do not believe he makes stock picks. Rather he breaks down ads for newsletter to let us know what they are pushing. Not his picks.
Never said it was a pick… If memory serves it was a tease as a “Trump” stock. Hendrixnuzzles wrote extensively about it, seemingly for good reason(s), which is what I referred to. Sorry if I’m mixing and matching forums on this one. Regardless, not a word on this since over a year ago despite considerable development as a business. Others have asked for an update also, to no avail.
This was a teased pick that Myron wrote about. He hasn’t been active lately for health reasons, I’ve never looked at it or followed it myself, and we do not routinely follow up on each reader stock we cover.
As Travis said, a once fairly regular contributor touted it, calling it I believe a “no-brainer.” Alas, I was one of the no-brains who invested in it. My faux pas, I’m an adult. Anyway, there’s been no followup, probably for good reason, given how no-brainer has so sunk.
As I recall, the “no brainer” term came from the ad we were writing about, not from our commentary.
Though Myron was certainly positive on the stock as well. Don’t know how he feels about it today.
Sorry to hear Myron isn’t well…here’s hoping for a speedy recovery. $SNS long., small position. I’ve been following the company loosely and they appear to have achieved a significant amount in the past year or so. Operations are in full swing. Revenue is rising. The resource base is expanding. Demand is increasing from their principal target market (Permian). Rising oil prices add to the positive picture. Sure, prices can slide for any (or no) reason but this seems like a MUCH better value now than when first teased. Anyone else following with another take?
Wade: I feel your pain. I lost quite a bit on this stock. I distinctly recall reading Myron’s article and feeling that this was the best stock tip I’d ever received from this newsletter. So I bought quite a few shares at .95 and finally let it go several months ago at a significant loss. I share your sentiment: my faux pas … lesson learned.
Wade, have you looked at numbers and operations recently? I would love another set of eyes (and brain) on this one, as I am seeing only reasons to add. Original premise still holds (significant shipping cost advantage to Permian coupled with strong and increasing demand) plus a (now) functional operation that is closing in on profitability and expanding the resource. Management appears to be doing exactly what one would reasonably expect and want them to do. I took a starter position early so am near even. That’s not really important, just sharing my particular situation…but at this price and stage of development, I’m strongly considering moving to a fuller position here.
Funguy, I’m flattered but I’m hardly a stock analyzer. I have looked at their year-end report, though, which like you have said, looked extremely promising, numbers up, business expanding, etc., but then again, it’s a company report. Why has its stock value then crashed so? Energy of course has not recently been the chichi sector to be in, but still…Maybe it’s now a case of buying low, but I was hoping that was the case when I first purchased!
Wade, Yeah, it’s always a challenge to gauge how much reporting should be taken as factual and not PR or wishful thinking. But nothing I’ve read or heard leads me to believe the general picture here is inaccurate. The volatility doesn’t surprise either with a stock price that rises and falls fast and hard. Nothing really unusual there. That said, I am somewhat relieved no one has offered up an obvious defect I’ve missed, just buyers remorse since it didn’t fly high and stay high. If I had a nickel for every stock that qualified for those sentiments, lots of nickels…
A nice rise for SLSDF today. Must be some connection to the turnaround in the national policy toward Iran, as “Trump’s America” turns inward. (?!?) Of course tomorrow no doubt there will be a precipitous drop to balance off today’s jump!
Marginally helped by prospect of removing a few million barrels/day of Iranian oil? Far more significant, IMO, is 2.5x avg volume yesterday on an up day, a VERY positive signal. Well deserved after 2 consecutive quarters, major milestones accomplished and long runway.
Sorry, coffee clearly hadn’t kicked in yet….should read: Marginally helped by prospect of removing a few million barrels/day of Iranian oil? Far more significant, IMO, is 2.5x avg volume yesterday on an up day, a VERY positive signal. Well deserved after 2 consecutive PROFITABLE quarters, major milestones accomplished, and long runway.
Just saw this reporting announcement
Another fine market for Selects Sands (SLSDF), up nearly 12% for the day. Now I’m back up to nearly one-third of my original investment; it pays to be patient, eh?
Select Sands SLSDF / SNS.V If I’m reading this company right, and obviously barring significant negative unforeseeables, we should be happy with this company within a few more quarters. Hoping (more expecting) the 1Q18 report due in a couple days shows a third consecutive (and growing) quarterly profit. Here’s to kicking ourselves next year for not backing up the truck at today’s price.
Results for 1Q18 scheduled for May 18th, 11:00 AM EST.
Long $SNS.V, fp, + adding on dips based on continuing profitable operations and gains outlined in the 1Q18 earnings report. $SNS.V / $SLSDF could reasonably trade in the USD $1.30 to 1.50 range 3-4 quarters down the road if operations, sales & pricing simply remain at current levels, and applying a very conservative 10x PE. That also doesn’t factor expanded volumes from a recently expanded resource base which will add substantial production capacity and some efficiencies. Myron still appears to have been spot on with this one, despite the wild ride in stock price. My confidence in this company rises with each consecutive quarterly profit and I expect the market will come around again after a year or so of consecutive positive quarterly earnings. Anyone have reasons/observations to support a bearish (or even less bullish) view?
Thanks, FG, for your due diligence. Will seriously consider your analysis, though human nature being what it is, it is a psychological challenge to buy more of something you’ve already taken a huge hit on. The energy sector as a whole though is due a nice rise.
Fair enough about perceptions for those who have lost $ here, Wade. I’m more than hanging in there and still foresee a significant price rise as the single most likely outcome. Second most likely outcome is a short-term hiccup that delays sustained profitability and consequent rise in share price. Consider just a few basics: Fracking appears here to stay (and the primary reason the US is now an oil exporter.) Drilling tech is lengthening bores, requiring ever more frac sand. Re-fracking those lengthening bores (and most tight oil bores) multiple times is cost-effective. Supplies of high-grade frac sand remain limited relative to demand and alternatives to high-grade frac sand are not as cost effective. Select Sands first became profitable during a period of relatively LOW oil prices and is largely insulated from fluctuations in oil price. (An argument can also be made that falling oil prices stimulate demand for frac sand, as a relatively small marginal cost per additional barrel produced)
All of which makes for a reasonably predictable outcome for Select Sands, underscored by now repeated quarters of profitable operations.
Long SNS.V / SLSDF, fp+
Myron, any chance you can weigh in on this if you’re feeling up to it? Your perspective would be greatly appreciated!
Fully appreciate and value your logical insights. Everything you state makes total sense. Yet despite all that, not to mention the glowing first quarter report, Sands’ stock keeps dropping, as it been doing so, more or less, for more than a year, and besides low oil prices (which are now rising), I just don’t know why. I wish I had paid more attention to following “Momentum” investing–go with what’s trending up, not down–but perhaps this is the time when savvy investors can follow the oft-quoted-but-seldom “Buy-Low” scenario. I , too, have tried to contact Myron for his current take on the company, but so far no luck. Regrettably, he must be very ill.
$SNS.V / $SNSDF. 10% daily gain on 5.5x average volume after another profitable quarter. Pricing appears holding strong, output increasing very significantly quarter after quarter, and sales growing VERY nicely. Plus a reasonable strategy to streamline operations further. Still on target to trade in the 1.30 to 1.50 range by early 2019 or sooner, barring hiccups of course.
May 16 price : 0.359
August 13 price: 0.340
I took my losses…not blaming anyone. Hope it does well in the future but it will be without me.
$SNS.V / $SNSDF Heck of a kick in the nuts learning Select Sands had and then lost a single buyer for such a large % of sales with little notice. What now? trading under $.10 cents. If the original premise for this company is worth a damn they have a cost to wellhead pricing advantage over the competition, and thereby a way forward. Even a drastic step like pricing closer to marginal cost temporarily should buy time to find other buyers and make up the lost volume. Unless there’s other bad news, this shouldn’t be game over.
Have lost my shirt — and half my trousers — on this one. So much for a “no brainer.”…I have “No Brain” for sticking with it.
Haven’t been following that Select Sands story this year, but it’s hard to give up when a stock is falling. Sometimes the path to a 90%+ loss is a 50% drop, then another 50% drop, then another 50% drop… and one final 50% drop. Usually after those kinds of drops it can feel too terrible to act, and feel like it must bounce back — but without a real fundamental change to the supply/demand balance that kind of bounce back doesn’t often happen in commodity markets. Sounds like the oil boom in the Permian must have caused a bunch of new sand mines to get built and crushed the pricing, all those frac sand stocks that seemed “kind of cheap in 2016 or 2017 appear to have had a really bad couple years.
Yeah, I’m losing skin here also. Not completely unfamiliar terrain, unfortunately. For me, this isn’t a major position yet enough to sting if it goes bad (or should I say goes worse?). Ok, so rock and hard place meet with us squished in between. Bail and crystalize loss? Average down? Hold pat? Some compromise? For better or worse I added at $.095 this morning since I really don’t think this should be game over. Unless there is more bad news coming, still moves to be made by management, or so it seems to me.