SAC Capital Piles Into Fracking Sand

A 13G filed with the Securities and Exchange Commission has disclosed that billionaire Steve Cohen's SAC Capital Advisors recently maintained a position of 2.1 million shares in U.S. Silica Holdings (SLCA), a miner of commercial silica, which is used as "frack sand" in the hyrdrofracking process that is currently under way in oil and gas shale plays throughout the U.S. U.S. Silica's products are also used in other industrial operations. SAC appears to have purchased all of these shares since the beginning of April.

Fracking's growing role in the U.S. energy industry has boosted U.S. Silica's sales: Its revenue rose 19% last quarter from the first quarter of 2012. However, the company's costs have also been rising, and the result is that operating and net income showed small declines. All of the increase in business at U.S. Silica came from oil-and-gas-related operations, but as might be expected from the rise in costs, this was due to higher production volumes rather than changes in the price of frack sand. Increases in working capital caused cash flow from operations to be negative for the quarter, though not worryingly so in the context of current cash and working capital balances....443 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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