Industrial sand specialist U.S. Silica Holdings, Inc. (NYSE:SLCA) fell -51.67% in sympathy with a beleaguered competitor. Specifically, Emerge Energy Services LP (NYSE:EMES), which operates within a constrictive MLP structure (where it must distribute most of its profits), has sharply slashed its distribution guidance this year. The market simplistically applied Emerge’s woes to U.S. Silica, whose standard equity structure gives it far greater maneuverability. At the current price, Silica trades at a deep discount to our estimate of its intrinsic value.
From John Rogers (Trades, Portfolio)' Ariel Fund Third Quarter 2015 shareholder letter.
