Small Cap Insight
Nothing like a name change to make the market forget about a previously hot stock. Back in May, Heckmann changed its name to Nuverra Environmental Solutions (NES)
to more accurately reflect its focus on environmental solutions in the
energy sector. The stock has done nothing but plunge since the beginning
of June whether due to the sector weakness or the market losing focus
on the 'new' company. Either way, the stock is trading at lows not seen
since the revolutionary merger that combined Heckmann with Power Fuels
back in the summer of 2012.
The company dedicated to the
protection and enhancement of environmental solutions for the removal
and disposal of restricted fluids primarily from shale drilling
activities isn't exactly benefiting from the boom in production from
shale. As environmentalists fret over the safety of the fluids used in
fracking, Nuverra was suppose to benefit from the need to safely dispose
of those 'dangerous' fluids. Unfortunately, the boom came to an end in
2012 and the stock only trades at a value of $730 million or less than
4x EBITDA estimates.
Read the full article at Seeking Alpha.
Disclosures: Long CJES and NES. Please review the disclaimer page for more details.