From the Watch List 10/7: SLCA

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

From the Watch List 10/7: SLCA

Post by dan_s »

From my friends at Stifel.

U.S. Silica Holdings, Inc. (SLCA, $8.48, Buy; Target $16.00)
SLCA Exploring Strategic Options for its ISP Segment; Likely a Positive to Unlock Value; Maintain Buy - Stephen Gengaro
U.S. Silica announced it is exploring strategic options including the separation or sale of its Industrial & Specialty Products (ISP) segment. Management noted (and we agree) that SLCA's valuation appears tightly correlated with energy markets, and the separation of the businesses likely unlocks significant value. We expect the shares to react well to this announcement, and we maintain our Buy with a sum-of-the-parts target price of $16.

SLCA is a sand company that is oversold. They do sell frac sand, but they also sell a lot of other products.
Dan Steffens
Energy Prospectus Group
mkarpoff
Posts: 809
Joined: Fri May 30, 2014 4:27 pm

Re: From the Watch List 10/7: SLCA

Post by mkarpoff »

...but they are a sand company first and foremost; an industry where few are buying the product. It is hard to get excited about that. What ever happened to Hi-Crush' assets?
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: From the Watch List 10/7: SLCA

Post by dan_s »

Just passing on that Stifel thinks SLCA could be a double. It is much more than a frac sand company. I don't what happened to the Hi Crush assets.

The upstream companies still need a lot of frac sand and as D&C budgets expand, the sand companies will get more pricing power. Supply & Demand for all commodities drives the price.
Dan Steffens
Energy Prospectus Group
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