CARBO Ceramics, Inc. (CRR)

187

Gas shales represent the future of North American natural gas production. Carbo is one of the suppliers of proppant for natural gas wells that are hydrofractured. This technology will spread worldwide, as companies like CHK and STO explore for gas shales in Europe, Australia, China, and elsewhere. Currently (spr 09) gas shales are the only plays were rig counts are rising. Carbo will be seeing rising income before other service companies because it is so integral to gas shale plays like the Haynesville.

A recent pick by a CAPS Top-10 + C or better score in Navellier PG.

motley fool, tenmiles

Debt free, deep value play in the oil patch. Sector is depressed due to poor rig numbers, but steady demand for company's proppant agent provides some relative protection - plants are operating at full capacity per recent conference call. Likely to outperform broad market for those with 3-5 time horizon from current $27.50 level.

Stable long term stock

Outperform city ba ba ba ba ba ba ba oo mau mau ba ba oo mau mau ba ba ba oo mau mau ba ba oo mau mau ba ba ba oo mau mau ba ba oo mau mau ba ba ba oo mau mau ba ba oo mau mau ba ba ba oo mau mau ba ba oo mau mau ba ba ba oo mau mau ba ba... babababababababa OOO

This baby has super breakout written all over it, and I'm not talking about the video game OR skin disorder. Can you believe it!?

Bought this 2 months ago and have seen a healthy gain. But does anyone know why short holdings are so high? Near 20%.

I love triple top breakouts. I'm sure everyone else does here to, unless you like to short. Triple top breakouts are generally a good indicator a stock will raise going forward as long as certain conditions maintain. First thing with respect to this trend is to make sure the stock that does this is in a favorable sector that has strong growth characteristics. Another important aspect is a company that is a leader in their technology or even better has a basic monopoly. Lastly, a long term, favorable chart that may indicate a multiyear movement is icing on the cake.

CRR is a company that has all of these things. Carbo Ceramics Incorporated is in the profitable oil and gas industry. They provide ceramic proppants and technology for fracture optimization. The fracturing technology is very important with respect to getting to huge oil and gas reserves with respect to shale. Shale is very important to current energy... More I love triple top breakouts. I'm sure everyone else does here to, unless you like to short. Triple top breakouts are generally a good indicator a stock will raise going forward as long as certain conditions maintain. First thing with respect to this trend is to make sure the stock that does this is in a favorable sector that has strong growth characteristics. Another important aspect is a company that is a leader in their technology or even better has a basic monopoly. Lastly, a long term, favorable chart that may indicate a multiyear movement is icing on the cake.

CRR is a company that has all of these things. Carbo Ceramics Incorporated is in the profitable oil and gas industry. They provide ceramic proppants and technology for fracture optimization. The fracturing technology is very important with respect to getting to huge oil and gas reserves with respect to shale. Shale is very important to current energy needs as there is a vast abundance within areas of the United States but use to be inaccessible with respect to older drilling techniques. It is estimated that the Bakken Shale in Canada, Montana, and North Dakota that there are reserves in excess of that found in Saudi Arabia and all we have to do is figure out how to get to them. Now that many companies are drilling with more capabilities they are buying more of CRR's products.

The first quarter is a sign of things to come. Although next quarter will be slow, it generally is in Canada due to the weather, the year's outlook looks awfully conservative. This is because the United States has become a majority player with respect to revenues for this company. The likes of XTO and CHK have grown greatly using this technology. They just reported $.58 per share as opposed to consensus of $.55. I believe this to be the start of a great year to come. Even though they saw a 7% increase in profit, the story remains the sale of proppant. Revenue was up 21% as volume of proppant sales increased by 24%. This increased revenue by 50% year over year. Even more exciting is the bullish chart with respect to natural gas that will give companies much more money to spend.

What to remember is that this company should not sell like oil and gas company, the reason is that it is more of a technology firm and should be selling at a PE of between 25 and 30. They now have the technology to offer Stillwater drilling techniques which have been accepted well in Texas and Oklahoma.

For those of you out there that are technicians, take a look at the chart fundamentals. They tell us this stock is headed for a major breakout, and at this point they are already on the cusp. A recent upgrade on no debt and increased operating cash flow and this could push the stock above the current resistance level of $51.71 on October 11th of 2007. If this level is breached the stock looks to be headed for $65. When the stock fell last time, it was will little reason, and if you compare the stocks chart it seems to be tracking close to that of CHK who does a lot of this type of drilling. A major breakout this year seems imminent and more importantly, with natural gas selling at all time highs, there could be consolidation in this space. If the chart is superimposed over itself we also see that the stock on its current pattern looks to hit $65 within the next three months.

Look it up

Unfairly beaten down. A great value. Growing revenues, earnings, and dividends. Plenty of excess production to meet future increases in demand.

dg

Going to base this pick on the advice of others.. they all think it's going up, and most have picked it up in the mid-40's.. now that's it's sitting at 37.50, time to get in.

Carbo Ceramics is the high volume producer of lightweight proppant in North America, and has a global presence. What some don't realize is that their business is as dependent on natural gas prices and demand as it is on oil, particularly in the US. If we have a cold winter, or if the price of natural gas begins to catch up with oil valuations (what is it traditionally a 7:1 ratio?), natural gas drilling and stimulations will increase, as will Carbo's sales. Currently, they have a plant lying idle, however if sales volume increase, they have the capacity in place to meet that demand and blow the doors off currently deflated sales expectations.

I do not own CRR, however I plan to take my first third if/when it drops below $39 again.

Undervalued

Based on the oil and gas business.

Deep oil drilling.

POSTED AT 4/27/2007 7:43:37 AM

The stock CRR has paid out a dividend of $0.12. The starting price for your pick has been adjusted to reflect the value of this dividend payout.

What a hidden gem. A pure play in the area of ceramic proppants to enhance production of existing natural gas and oil wells. With less than 25 million shares outstanding, and with the majority of the shareholders being institutional, this stock is poised to triple in value very easily. Stock splits, upon stock splits. The potential is incredible.