Why U.S. Silica Holdings' Shares Jumped (SLCA)

Why U.S. Silica Holdings' Shares Jumped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of U.S. Silica Holdings (NYSE: SLCA ) jumped 10% briefly today after the company announced a share buyback program.

So what: Management said that the board of directors authorized a $25 million stock repurchase program to be completed over the next 18 months. This will be in addition to normal capital expenditures and will use available cash on hand.

Now what: Management thinks the stock is cheap and you can see why when you look at the numbers. The trailing P/E ratio is 13.1 and the forward P/E ratio is just 5.8, an extremely low valuation. Add to that the fact that the company has crushed earnings estimates in the last two quarters and it looks like a good use of cash. I think this will be a catalyst for the stock moving higher, especially if the good performance continues.

Interested in more info on U.S. Silica Holdings? Add it to your watchlist by clicking here.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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