US Silica Holdings (SLCA) Highlighted As Weak On High Volume

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.

Trade-Ideas LLC identified US Silica Holdings ( SLCA) as a weak on high relative volume 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 $44.2 million.
  • SLCA has traded 248,294 shares today.
  • SLCA is trading at 2.07 times the normal volume for the stock at this time of day.
  • SLCA is trading at a new low 4.00% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on SLCA:

U.S. Silica Holdings, Inc. produces and sells commercial silica in the United States. It operates through two segments, Oil & Gas Proppants, and Industrial & Specialty Products. The stock currently has a dividend yield of 1.4%. SLCA has a PE ratio of 16. Currently there are 10 analysts that rate US Silica Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for US Silica Holdings has been 2.2 million shares per day over the past 30 days. US Silica has a market cap of $1.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 3.05 and a short float of 34.9% with 13.47 days to cover. Shares are up 38.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates US Silica Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.6%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, U S SILICA HOLDINGS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income has decreased by 19.3% when compared to the same quarter one year ago, dropping from $18.37 million to $14.82 million.
  • U S SILICA HOLDINGS INC's earnings per share declined by 20.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, U S SILICA HOLDINGS INC increased its bottom line by earning $2.24 versus $1.41 in the prior year. For the next year, the market is expecting a contraction of 47.3% in earnings ($1.18 versus $2.24).
  • The gross profit margin for U S SILICA HOLDINGS INC is currently lower than what is desirable, coming in at 32.02%. Regardless of SLCA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SLCA's net profit margin of 7.26% compares favorably to the industry average.

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