United States Lime & Minerals

If you’ve followed me for some time, you know that I have a soft spot for small, not well-known stocks that have performed very well.

Here’s another good example—United States Lime & Minerals (USLM).

Fourteen years ago, USLM was going for $3 per share. Today it’s at $77. So how many analysts follow it? Zero.

The stock has a market cap of $425 million. I also have to say that I love that name.

So what do they do? From their website:

United States Lime & Minerals, Inc. (“US Lime”) is a public company traded on the NASDAQ Global Market® under the symbol USLM and conducts its business through two segments:

Lime and Limestone Operations and Natural Gas Interests.

The Lime and Limestone Operations manufactures lime and limestone products, supplying primarily the construction (including highway, road and parking lot contractors), metals (including steel producers), environmental (including municipal sanitation and water treatement facilities and flue gas treatment), oil and gas services, industrial (including paper and glass manufacturers), roof shingle and agriculture (including poultry and cattle feed producers) industries. The company is headquartered in Dallas, Texas, and primarily serves markets in the Central United States and consists of open-pit quarries and an underground mine, plants and distributions facilities owned by US Lime’s wholly owned subsidiaries: Arkansas Lime Company, Colorado Lime Company, Texas Lime Company, U.S. Lime Company, U.S. Lime Company — Shreveport, U.S. Lime Company — St. Clair and U.S. Lime Company — Transportation.

Through its wholly owned subsidiary, U.S. Lime Company — O & G, LLC (“U.S. Lime O & G”), under a lease agreement (the “O & G Lease”), US Lime has royalty interests ranging from 15.4% to 20% and a 20% non-operating working interest, resulting in an overall average revenue interest of 34.8%, with respect to oil and gas rights in wells drilled on approximately 3,800 acres of land located in Johnson County, Texas, in the Barnett Shale Formation. Through U. S. Lime O & G, US Lime also has a drillsite and production facility lease agreement and subsurface easement (the “Drillsite Agreement”) relating to approximately 538 acres of land contiguous to Johnson County, Texas, property. Pursuant to the Drillsite Agreement, US Lime receives a 3% royalty interest and a 12.5% non-operating working interest in any wells drilled from two pad sites located on the property.

Not too sexy, but they make money. Don’t expect to hear a lot about this one on TV or in the newspapers. USLM is about as dull as they get. About the only time they make news is when they release their quarterly earnings, and no one seems to pay too much attention to that.

Posted by on January 19th, 2017 at 12:35 pm

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