Today's Dead Cat Bounce Stock: US Silica Holdings (SLCA)

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 "dead cat bounce" (down big yesterday but up 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 $116.7 million.
  • SLCA has traded 59,060 shares today.
  • SLCA is up 3.7% today.
  • SLCA was down 7.2% yesterday.

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More details on SLCA:

U.S. Silica Holdings, Inc. produces and sells commercial silica in the United States. The company operates in two segments, Oil & Gas Proppants, and Industrial & Specialty Products. The stock currently has a dividend yield of 1.9%. SLCA has a PE ratio of 14.0. Currently there are 12 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 3.6 million shares per day over the past 30 days. US Silica has a market cap of $1.5 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 3.29 and a short float of 17% with 1.95 days to cover. Shares are down 23.5% year-to-date as of the close of trading on Thursday.

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

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, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • SLCA's very impressive revenue growth greatly exceeded the industry average of 15.9%. Since the same quarter one year prior, revenues leaped by 67.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 38.24% is the gross profit margin for U S SILICA HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.10% is above that of the industry average.
  • SLCA's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.57 is very high and demonstrates very strong liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, U S SILICA HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • SLCA has underperformed the S&P 500 Index, declining 21.54% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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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