Agreed. The share price usually dips for a few days until the secondary offering is announced. Great time to pick up shares at a discount.
Everyone waiting on the conference call I'm sure. Margins look stable, analysts I'm sure will be asking about margin outlook as well as the future guidance. Management has been excellent in providing accurate guidance - CC is uber important.
Also remember the shares are up 50% from Q2 earnings. We might not see much movement considering the multiple is now in "fair" territory IMO. It took 18 months... but SLCA is no longer a value play. 335% since initial investment around $11 last summer.
It's been a gift since $10. Lots of buyers with the 14 million shorts. The potential negatives are:
1) Major shareholder GGC still has 17 million shares they may do another secondary offering
2) Margins have decreased slightly the last two quarters from providing contract prices (cheaper) when they could have charged spot prices
3) The debt could be a concern - but they recently refinanced at advantageous rates
The fact is they are accelerating growth and if there does happen to be a final offering by GGC it would be a great opportunity to buy non-dilutiive cheap shares. I'd welcome a #1 so I could buy back my other 50% holding on a dip.
I agree with you 100%. All the frackers are continuing to lean more and more towards sand (and more sand per well). Until nat gas prices rise and oil is at 150, I just don't see producers spending the money on ceramics and deep wells.
Purely my opinion, I believe SLCA's moves to honor contracted prices to clients should bode very well to their continued market share growth (as opposed to selling at spot prices and boosting quarterly EPS). A "lose the battle - win the war" mentality I like to see in my investments.
I have taken some off the table, but I wouldn't want to step in front of the freight train (pun intended) and short it. The last time the squeeze from 18 to 28 happened, only 1 million shares covered - there were 14 million shares short as of 16 days ago. The official short interest data hasn't been released yet on this recent run up.
If you have followed them since the IPO they are beating estimated volumes every quarter. They have accelerated EBITDA growth by a full year and have increased their footprint nearly 100% over previous guidance via transloads and partnerships. Not to mention the have accelerated the growth of the production facilities and the sleeper RCS facility. Also, if you follow the ceramic producers, they have repeated for 18 months now they are still losing share to cheaper high quality sand proppants.
The only what-ifs I'm still looking at is the potential for another GGC secondary offering which could stall the share price and I want to see the margins stabilize (or increase) on the next earnings.
I have cashed out my calls, and still holding a 50% stock position through earnings.
This has been a good call so far. DNN is at the top of the buy list now that we are working through the bearish technicals. I am waiting for the debt ceiling issues to be settled and going long DNN near the end of Oct before the seasonal strength.
There is still a potential overhang from GGC. They do still have a lot of shares and could potentially do a third secondary offering. I'm still long 50% position, sold the other half into the 25.50 strength few weeks ago. I'm waiting until earnings now to maybe add the other half back. Still love the story, but the GGC overhang and margin compression makes it a wait and see for me. (the speculator in me might buy some deep otm calls before earnings though on a surprise margin bump)
Interesting, but not surprising. The last few days have been interesting, someone is accumulating below $25. Good volume and holding up as markets sell off.