Nuverra: 4 Different Insiders Have Purchased Shares During The Last 30 Days

Dec.13.13 | About: NUVERRA ENVRNMNTL (NESC)

In this article, I will feature one environmental solutions company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increased their holdings by more than 10%.

Nuverra Environmental Solutions (NES) provides full-cycle environmental solutions to customers in energy and industrial end-markets in the United States.

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Insider buying during the last 30 days

Here is a table of Nuverra's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Christopher Kevane EVP Dec 10-11 4,000 4,000 shares from 0 to 4,000
Jay Parkinson CFO Dec 10 5,000 27,500 shares +22.2%
Mark Johnsrud CEO Nov 29-Dec 11 126,291 9,626,291 shares +1.3%
Christopher Chisholm EVP Dec 11 3,000 18,000 shares +20.0%
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There have been 138,291 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Nuverra's insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
December 2013 38,291 0
November 2013 100,000 0
October 2013 0 0
September 2013 0 0
August 2013 925,000 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 1,063,291 shares purchased and there have been zero shares sold by insiders this year.

Financials

Nuverra reported the third-quarter financial results on November 7 with the following highlights:

Revenue $162.6 million
Adjusted EBITDA $25.1 million
Net loss $193.7 million
Cash $9.9 million
Debt $536.0 million
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(Source: November presentation)

Outlook

Nuverra currently expects to complete the divestiture of TFI late in the first quarter or early in the second quarter of 2014, and plans to apply all net proceeds toward the reduction of bank debt and general corporate purposes.

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(Source: November presentation)

In the fourth quarter, Nuverra does not expect a material change in overall business activity, as customers have indicated plans to prepare for increases in 2014 activity and not make substantial changes to planned activity for the remainder of 2013. Given this fact, Nuverra believes the seasonal slowdown in the fourth quarter could be greater than normal. Additionally, Nuverra expects to incur expenses relating to hiring personnel to meet forecasted 2014 demand, which could impact margins.

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(Source: November presentation)

Competition

Nuverra's competitors include Clean Harbors (NYSE:CLH) and Waste Management (NYSE:WM). Here is a table comparing these companies.

Company NES CLH WM
Market Cap: 382.89M 3.36B 20.56B
Employees: 2,698 13,180 43,500
Qtrly Rev Growth (yoy): 0.75 0.70 0.05
Revenue: 600.80M 3.19B 13.92B
Gross Margin: 0.12 0.28 0.35
EBITDA: 90.64M 448.77M 3.40B
Operating Margin: -0.03 0.06 0.15
Net Income: -214.23M 130.64M 927.00M
EPS: -9.40 2.19 1.98
P/E : N/A 25.23 22.13
PEG (5 yr expected): -0.06 2.94 6.45
P/S: 0.62 1.04 1.48
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Nuverra has the lowest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
CLH 0 133,440
WM 0 174,549
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Only Nuverra has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Nuverra and there have not been any insiders selling Nuverra during the last 30 days. Three of these four insiders increased their holdings by more than 10%. Nuverra has an insider ownership of 37.10%.

There are five analyst buy ratings, four neutral ratings, and two sell ratings with an average price target of $23.33. Nuverra has a book value of $26.43 per share. I believe the stock could be a good pick below the book value based on the intensive insider buying.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in NES over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.