Why U.S. Silica (SLCA) Stock Is Up Today

NEW YORK (TheStreet) -- U.S. Silica (SLCA) was gaining 6.1% to $68.42 Wednesday after increasing its EBITDA estimates for full year 2014.

The silica sand supplier now expects EBITDA of $230 million to $240 million for 2014, up from its previous guidance of $215 million to $225 million. The company said the increase is due to the strength of the markets for both of its operating segments.

U.S. Silica reiterated its capital expenditures guidance for full year 2014 in the range of $95 million to $105 million with an effective tax rate of about 27%.

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The company said it plans to announce its third quarter results after market close on Oct. 29.

TheStreet Ratings team rates U S SILICA HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate U S SILICA HOLDINGS INC (SLCA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, solid stock price performance, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SLCA's very impressive revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues leaped by 58.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 65.25% to $24.92 million when compared to the same quarter last year. In addition, U S SILICA HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -21.40%.
  • Powered by its strong earnings growth of 39.47% and other important driving factors, this stock has surged by 189.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • U S SILICA HOLDINGS INC has improved earnings per share by 39.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, U S SILICA HOLDINGS INC reported lower earnings of $1.41 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.41).
  • 35.66% is the gross profit margin for U S SILICA HOLDINGS INC which we consider to be strong. Regardless of SLCA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLCA's net profit margin of 13.92% compares favorably to the industry average.
  • You can view the full analysis from the report here: SLCA Ratings Report

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