Why Shares of U.S. Silica Holdings Climbed 17% in November

What: Despite the weak oil and gas market, shares of U.S. Silica Holdings climbed more than 17% on the back of a steady earnings report before the month got started.

So what: The numbers in U.S. Silica's most recent earnings came nowhere close to wowing investors. Operational profits from its oil and gas proppant business declined more than 78% compared to the same quarter last year. Despite that bad news, there was actually something that was promising. One was that the company was able to offset some of these losses with gains from its industrial and specialty products business. Also, as part of the earnings announcement, CEO Bryan Shinn said that the company was actively selling higher volumes of sand to take market share from competitors in a highly fragmented market.

SLCA data by YCharts.

What these moves suggest is that the company is in the best financial shape to handle the market decline, and investors seem to be rewarding U.S. Silica for its prudence.

Now what: Frack sand supplied by U.S. Silica has become a critical component of the oil and gas industry, especially here in the U.S. When oil and gas drilling activity does pick back up again, chances are U.S. Silica will be in the best financial standing of its peers to ramp up production and spending. How long that takes is anyone's guess, but investors looking at U.S. Silica because of its relative strength in this market need to remember that we might still be a ways away from a market rebound.

The article Why Shares of U.S. Silica Holdings Climbed 17% in November originally appeared on Fool.com.

Tyler Crowe has no position in any stocks mentioned.You can follow him at Fool.comor on Twitter@TylerCroweFool. The Motley Fool recommends U.S. Silica Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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