US Silica Holdings (NYSE:SLCA)

CAPS Rating: 5 out of 5

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Player Avatar sikiliza (< 20) Submitted: 2/27/2013 1:38:46 PM : Outperform Start Price: $20.06 SLCA Score: +5.50

There may be strong demand for fracking sands but given this stocks huge run-up in the last couple of days, it might be wise to hold back and watch for a little while. The company's total dependence on oil production and specifically, fracking means that its fortunes are tied to those of OIl and Gas.

Therein lies the problem. They may be able to hold sway over prices for a while but sooner or later, some oil player will realize that it makes more sense to do the sands themselves, or even find a way to recycle them and then things would get real exciting.

Short term bullish outlook; medium term price stagnation and possible reversion to a more fair value.

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