Back to top

Analyst Blog

Zacks Equity Research

U.S. Silica Declares Exercise of Option to Buy 1.35M Shares

BHP BBL SLCA SOUHY

Trades from $3

U.S. Silica Holdings, Inc. (SLCA - Free Report) has declared the full exercise of the underwriters' option to buy 1.35 million additional shares of its common stock.

The option was granted by U.S. Silica to the underwriters in connection with the earlier completed public offering of 9 million shares of common stock. Morgan Stanley & Co. LLC and Barclays Capital Inc. acted as joint book-running managers for the public offering.

U.S. Silica plans to utilize the net proceeds of the offering for general corporate purposes. This includes potential acquisition of complementary businesses or assets.

The shares of the company rose 0.3% to close at $47 on Nov 23.

U.S. Silica registered a loss of $11.3 million or 17 cents per share in third-quarter 2016. The company had posted a profit of $2.4 million or 4 cents per share a year ago. The results in the third quarter were unfavorably impacted by business development-related expenses. However, adjusted loss of 13 cents per share in the quarter was narrower than the Zacks Consensus Estimate of a loss of 19 cents.

Revenues fell 11% year over year to $137.7 million in the third quarter, trailing the Zacks Consensus Estimate of $138 million. Overall sales volume fell 5% year over year to 2.5 million tons in the quarter.

U.S. Silica said that it will not provide any guidance for adjusted EBITDA until it gets a clear picture of business activity levels and related demand for its products. Factoring in the current market conditions, the company anticipates its capital expenditures for 2016 to be in the band of $42–$47 million.

While U.S. Silica is facing sustained challenges in its Oil and Gas segment, it remains focused on cost reduction and operational efficiency improvement. The company is executing many cost improvement projects throughout its supply chain.

Further, U.S. Silica’s strong balance sheet provides it with ample opportunities for making strategic investments that will help expand the life of its flagship operation and ensure its long-term competitive position in the market.

U.S. Silica currently has a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other well-placed companies in the basic materials space include BHP Billiton Ltd. (BHP - Free Report) , BHP Billiton plc (BBL - Free Report) and South32 Ltd. (SOUHY - Free Report) .

BHP Billiton Ltd. sports a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth of 147.8% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP Billiton plc also sports a Zacks Rank #1. The company has an expected earnings growth of 334.2% for the current year.

South32 is another Zacks Rank #1 stock. The company has an expected earnings growth of 476.9% for the current year.

Zacks’ Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>