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Did You Miss U.S. Silica Holdings' (NYSE:SLCA) Impressive 229% Share Price Gain?

·2 min read

While U.S. Silica Holdings, Inc. (NYSE:SLCA) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 25% in the last quarter. But that doesn't detract from the splendid returns of the last year. Indeed, the share price is up an impressive 229% in that time. So some might not be surprised to see the price retrace some. The real question is whether the business is trending in the right direction.

View our latest analysis for U.S. Silica Holdings

U.S. Silica Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year U.S. Silica Holdings saw its revenue shrink by 41%. So we would not have expected the share price to rise 229%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for U.S. Silica Holdings in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that U.S. Silica Holdings shareholders have received a total shareholder return of 229% over the last year. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with U.S. Silica Holdings .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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