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U.S. Silica Holdings Inc. (NYSE: SLCA) stock remains on our "2015 Top Stocks to Invest In" list.
And for good reason.
SLCA stock is up 43.1% in 2015. Right now that rise can be attributed to a bounce in crude oil prices. Both SLCA stock and crude oil prices had been falling coming into 2015. Crude oil fell as much as 60% between summer 2014 and March 2015.
Between SLCA stock's peak in September 2014 and its bottom in December, it had fallen 67%.
But this bounce won't be temporary. SLCA stock is sensitive to crude oil prices because as crude oil prices fall, oil companies drill fewer wells. And with fracking contributing so much to new domestic oil production, SLCA stock will take a hit when oil companies aren't drilling.
Fracking involves pumping millions of gallons of highly pressurized water into horizontal wells dug in shale rock. This opens cracks in the shale that allow oil and natural gas to flow into the well and reach untapped hydrocarbon deposits.
Silica provides "frac sand" - specialized sand that props open these fractures. Without this sand, those cracks would close up and the hydrocarbons would remain trapped in the shale.
And while U.S. Silica Holdings stock may have sold off rather dramatically, Money Morning Global Energy Strategist Dr. Kent Moors sees low oil prices, which are a product of an "abnormally oversold market, driven largely by the shorts," aligning better with growing demand in the coming months. He sees the price of oil heading to $65 to $70 a barrel by mid-summer.
And with that, SLCA stock price will continue to get a boost.
To see where SLCA stock sits among our 2015 top stocks to invest in, check out the list below:
Money Morning's Top Stocks 2015
U.S. markets are starting to gather steam. As of yesterday (Thursday), the Dow was up 0.8% on the year, while the S&P 500 was up 1.6%. The Nasdaq was on a roll this past week, and is now pushing 5,000. It's up 5% in 2015. Some of Money Morning's 2015 stock picks are starting to retreat a bit from their 2015 highs, while others continue to soar more than 30%.
Here are our top 10 for year-to-date gains as of the April 9 close:
Name | Symbol | 2015 Gain % |
Prothena Corp. Plc | PRTA | 75.3 |
Lannett Co. Inc. | LCI | 61.5 |
Ambarella Inc. | AMBA | 48.3 |
Ekso Bionics Holdings Inc. | EKSO | 46.3 |
U.S. Silica Holdings Inc. | SLCA | 43.1 |
JD.com Inc. | JD | 41.3 |
Novavax Inc. | NVAX | 38.1 |
Skyworks Solutions Inc. | SWKS | 37.3 |
Boston Scientific Corp. | BSX | 36.6 |
Thoratec Corp. | THOR | 30.0 |
Sources: Google Finance, Money Morning Staff Research
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