We purchased one new position in Ariel Appreciation Fund in the second quarter of the year, and eliminated two others. We added U.S. Silica Holdings, Inc. (NYSE:SLCA), a niche supplier of sand to the oil and gas market, primarily servicing the process of hydraulic fracturing. The company is the second-largest producer of silica in the United States and boasts a differentiated logistics and transportation network that makes it a key and preferred supplier among its customer base. In our view, the market underappreciates the strength of the company’s competitive position, the likely pace of its revenue and earnings as demand for sand continues to meaningfully increase, and the attractive cash flow characteristics of its business.
- From John Rogers (Trades, Portfolio)' Ariel Appreciation Fund second quarter 2017 shareholder commentary.
