Buy sand to make money

U.S. Silica Holdings (SLCA) is a 100-plus year old company, a leading producer of commercial silica (sand), a specialized mineral that is a critical input into the oil and gas proppants end market. It is red hot right now. So why does a sand producer become such a Wall Street star? It is all about oil and gas. If you still haven’t heard it, please be informed that the US is currently undergoing an industry revolution in the energy sector, which is making the US an exporter of oil and gas from a net importer. This is primarily the reason why the natural gas price is so cheap in the US as all the other countries are paying 3-5 times more than us. The key technology behind this revolution is so-called Hydraulic Fracking (HF). You can read here to see why the US may become the largest country in producing oil & gas surpassing Saudi Arabia due to HF. HF requires huge amount of sand and water in the process to crack the shale and release oil and gas contained in the shale. Each well will need as much as 5 million pounds of sand. That’s why the demand for sand is super high and the business for SLCA is outstandingly well. Actually the entire year of fracking sand production of SLCA has already been purchased by drilling companies. No wonder you can safely expect that SLCA’s earnings will continue to be strong. In its first quarter of this year, SLCA presented a record revenue of 180 million, an increase of 47.5% over the same period of last year. This is a super bull trend of the fracking boom happening in the US which will last for decades. There is simply no end in sight. SLCA is a perfect Pick-and Shovel player in this shale energy bull run. Given how high and fast it has run in the past year, it may come down a bit but any weakness is a great time to back up your truck to buy!