US Silica Holdings (SLCA) Is Today's Perilous Reversal Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified US Silica Holdings ( SLCA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified US Silica Holdings as such a stock due to the following factors:

  • SLCA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.8 million.
  • SLCA has traded 55,789 shares today.
  • SLCA is down 12.8% today.
  • SLCA was up 6.1% yesterday.

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More details on SLCA:

U.S. Silica Holdings, Inc., together with its subsidiaries, engages in the mining, processing, and sale of commercial silica in the United States. It operates in two segments, Oil & Gas Proppants and Industrial & Specialty Products. The stock currently has a dividend yield of 1.6%. SLCA has a PE ratio of 20.2. Currently there are 7 analysts that rate US Silica Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for US Silica Holdings has been 1.5 million shares per day over the past 30 days. US Silica has a market cap of $1.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 10.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates US Silica Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 24.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 57.69% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income increased by 13.5% when compared to the same quarter one year prior, going from $18.80 million to $21.33 million.
  • The debt-to-equity ratio of 1.30 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.49, which shows the ability to cover short-term cash needs.
  • Net operating cash flow has decreased to $18.36 million or 25.65% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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