Carbo Ceramics (CRR). Chris Orndorff. Financial Fundamentals (3/20/13). Current Price: $95.07 52 week range: $60.33-106.51 Beta: 1.18 Market Cap: $2.2 Billion P/E: 20.72 on EPS of $4.59 Dividend Yield: 1.1% ROE: 18.2% Trailing 12-month Revenue: $645.5 Million
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Carbo Ceramics makes ceramic beads that are used to prop open oil wells (called proppant). These ceramic beads help to keep fracked wells open so that the liquids are able to flow freely to the surface. Carbo’s ceramic proppant is considered by many to be the best proppant available.
Ceramic vs Alternative Proppant Diagram
Carbo Ceramics competitive advantages lie in a few main points:
The share price drop resulted largely due to investor fear of falling rig counts eating into profitability. This was due to the natural gas glut as well as falling gas commodity prices. Never fear, however, because the rig count is already stabilizing and increasing in fact. In addition, the natural gas glut is disappearing and prices are stabilizing and increasing. Second, investors were worried due to strong
Chinese competition. This has been resolved in large part by the increased fracking operations in China pulling those manufacturers back to China. In addition, many oil rig operators are switching to Carbo’s products for the higher yield rate.