Shares of U.S. Silica Holdings, Inc. (NYSE:SLCA), producer and supplier of silica and frac sand, sagged -45.64% during the quarter due to falling oil prices and investor concerns regarding the supply and demand mix for silica sand. Overall, lower oil prices have produced a domino effect that has pressured oil field service spending. Beyond supply concerns, investors continue to underappreciate the company’s industrial business relative to competitors. We believe the contributions from these less volatile return businesses—such as the investment in SandBox and EP Minerals—along with the company’s stable balance sheet, has SLCA well positioned from a risk/reward standpoint going forward.
- From John Rogers (Trades, Portfolio)' fourth-quarter 2018 Ariel Fund shareholder letter.
