U.S. Silica: The Likely Winner In The Frac Sand Cycle
Richard Zeits • 11 Comments
Richard Zeits • 11 Comments
U.S. Silica Holdings: Competitive Pressures May Threaten Future Margins
Richard Zeits • 20 Comments
Richard Zeits • 20 Comments
U.S. Silica Holdings: Severe Overcapacity To Cripple The Frac Sand Market
Stanislav Ermilov • 41 Comments
Stanislav Ermilov • 41 Comments
Mon, May 23, 11:58 AM
- U.S. Silica (SLCA +1.6%) is upgraded to Outperform from Sector Perform with a $33 price target, raised from $27, at RBC Capital, which thinks shares have significant potential upside based on its estimate of mid-cycle earnings power, which is not being fully discounted by investors.
- The firm raises its 2017 EPS estimate to $0.25 from $0.10 and introduces a 2018 estimates EPS of $0.90 on expected higher frac sand volumes and higher contribution margins in the proppant solutions segment due to improved fixed cost absorption.
- RBC assumes frac sand vols rise 30% Y/Y in 2018, with proppant solutions' contribution margin of 28%.
Mon, May 9, 9:09 AM
Wed, Apr. 27, 2:43 PM
- U.S. Silica (SLCA +4.1%) is higher after reporting a Q1 loss that came in above expectations despite continued pressure on both volumes and pricing in its oil and gas segment.
- SLCA says it sold 2.3M total tons during Q1, down 15% from 2.7M tons sold in the year-ago quarter and down 8% Q/Q; Q1's contribution margin was $17.7M, down 74% Y/Y and 20% Q/Q.
- SLCA says the capital raise during Q1 strengthens its balance sheet, which it says is a key strategic advantage over most in the frac sand industry and "puts us in the best position to drive industry consolidation."
- Says it will continue to refrain from providing guidance for adjusted EBITDA because of the current lack of visibility in its oil and gas business, but it expects FY 2016 capex of $15M-$20M.
- Now read U.S. Silica: The likely winner in the frac sand cycle
Tue, Apr. 26, 4:45 PM
Mon, Apr. 25, 5:35 PM
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Wed, Apr. 20, 5:45 PM
- Wells Fargo analysts say they are sticking with Halliburton (NYSE:HAL) as their top picks among oil service stocks even as the proposed merger with Baker Hughes looks increasingly iffy.
- The firm says it is re-adjusting its rankings with a bias towards large cap names along with high level of conviction towards execution, and expects the market to pay a premium multiple for the best-in-class names in the next multi-year recovery.
- In order, Wells' favorites in the sector are a stand-alone HAL, Baker Hughes (NYSE:BHI), U.S. Silica (NYSE:SLCA), Nabors Industries (NYSE:NBR), FMC Technologies (NYSE:FTI) and Schlumberger (NYSE:SLB); it maintains an Outperform on Weatherford (NYSE:WFT) but moves the stock down in the rankings based on debt concerns and re-investment capacity in a recovery.
- Now read Schlumberger is Barclays' top pick in North America oilfield services
Thu, Mar. 31, 11:59 AM
- U.S. Silica (SLCA -0.4%) is upgraded to Overweight from Neutral with a $25 price target, raised from $18, at Simmons, which likes SLCA's strong balance sheet and focus on low-cost production, including its exposure to Texas-based sand.
- The firm foresees rapid growth for SLCA, modeling a 2016 earnings loss of $0.93/share rising to a $1.13 profit in 2018.
- Piper also cites rising service intensity which it believes will continue, thus frac sand volumes should outperform both rig count and well completion growth rates, as well as a more positive macro outlook regarding the rebalancing of oil supply and demand.
- Now read Are frac sand mergers on the horizon?
Fri, Mar. 18, 12:24 PM
- Patterson-UTI (PTEN -5.4%), Superior Energy Services (SPN -6.5%) and Forum Energy Tech (FET -3.3%) are downgraded to Neutral from Buy at Citigroup, which believes the market may have gotten ahead of itself for the stocks.
- “For those already reflecting recovery multiples, we expect oil betas to begin diminishing or the stocks to simply take a pause in the absence of additional catalysts near term," Citi analyst Scott Gruber writes.
- The firm maintains its Buy ratings on Halliburton (HAL -1.1%) and U.S. Silica (SLCA -3.5%), saying the consensus 2018 recovery earnings estimates for the two high-quality companies remain too low.
Thu, Mar. 17, 3:57 PM
- U.S. Silica (SLCA +8.4%) is maintained with an Outperform rating at Cowen following its upsized 8.7M-share offering expected to raise $174M, which the firm views as an opportunistic offering in light of an open equity issuance window and a growing list of M&A opportunities, although nothing specific appears to be identified for the proceeds.
- Although SLCA’s near-term acquisition plans could include “non-traditional frac sands, logistics assets, or something within ISP,” over the long-term, the company is committed to making a transformation acquisition, Cowen says.
- SLCA will have $470M cash and cash equivalents following their offering, and net debt should be reduced to $20M.
Wed, Mar. 16, 4:33 PM
- U.S. Silica (NYSE:SLCA) -2.3% AH after announcing a public offering of 8M common shares, with an underwriters option to purchase up to an additional 1.2M shares.
- SLCA says it plans to use the proceeds for general corporate purposes including the potential acquisition of complementary businesses or assets.
Mon, Mar. 7, 6:49 PM
- Offshore drillers such as Seadrill (SDRL) staged a spectacular rebound last week, but Wells Fargo analysts Judson Bailey and his team suspect the group has come too far too fast.
- Although the firm says it remains constructive on the prospects of a long-term recovery in oil prices and in North American spending, it advises against chasing the short-covering induced rally and believes most offshore drillers have swung from fairly valued to overvalued.
- Wells says it prefers a balance of North American market share winners such as Baker Hughes (NYSE:BHI) and Halliburton (NYSE:HAL) along with select higher beta names such as U.S. Silica (NYSE:SLCA), Nabors Industries (NYSE:NBR) and Patterson-UTI (NASDAQ:PTEN) as a way to play a North American recovery.
- It's still "a game of survival" in offshore drilling, Barclays' David Anderson says, not expecting improvement in the downward trajectory of offshore upstream spending over the next two years, even if oil moves back above $50/bbl by year-end.
- Barclays is “extremely cautious” on offshore drilling stocks, with the firm seeing the most potential downside to Underweight-rated Transocean (NYSE:RIG), Diamond Offshore (NYSE:DO) and Noble Corp. (NYSE:NE)
Mon, Feb. 29, 3:30 PM
- U.S. Silica (SLCA +6.6%) is initiated with a Buy rating and $25 price target at Citi, which calls SLCA its top small- and mid-cap pick and the strongest secular growth story of any company in its coverage.
- Citi likes SLCA's significant operating leverage, manageable balance sheet risk and a modest valuation, and forecasts a doubling of revenues over 2016-18 and EBITDA eclipsing the 2014 peak.
- The firm notes that while SLCA has a large amount of fixed costs, it also has the potential to take significant market share and achieve high profitability due to economies of scale; also, while cash flows are expected to decline in 2016, Citi notes the company has a large enough cash balance to fund itself through 2018.
- SLCA also is Cowen's lone Outperform rating within the proppant group, while the firm lowers ratings for Hi-Crush Partners (HCLP -4.4%), Emerge Energy (EMES +3.3%) and Fairmount Santrol (FMSA -1.2%) to Market Perform from Outperform, driven by expected lower rig counts, continued price pressure, adverse fixed cost absorption and lower than expected profitability in Q4.
Wed, Feb. 24, 10:24 AM
- U.S. Silica (SLCA -13.3%) is sharply lower in early trading after reporting a steeper than expected Q4 loss driven by substantially lower oil and gas contribution margins.
- SLCA says overall tons sold during Q4 were 2.5M tons, down 18% from the 3M tons sold in the year-ago quarter of 2014, with 54% of tons sold in basin vs. 66% a year ago.
- Q4 oil and gas revenue totaled $88.8M vs. $196M a year ago; segment contribution margin was $7M vs. $80.4M in Q4 2014.
- SLCA says it will continue to refrain from providing EBITDA guidance until it can gain clarity into customer business activity levels and the associated demand for its products.
Tue, Feb. 23, 5:41 PM
Tue, Feb. 23, 4:34 PM
Mon, Feb. 22, 5:35 PM
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U.S. Silica Holdings, Inc. is a producer of commercial silica, a specialized mineral that is a critical input into the oil and gas proppants end market and a variety of attractive industrial and specialty products end markets. It produces industrial minerals, including sand proppants, whole... More
Sector: Basic Materials
Industry: Industrial Metals & Minerals
Country: United States
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