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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.

(click to enlarge)

Insider buying during the last 30 days

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

NameTitleTrade DateShares PurchasedCurrent OwnershipIncrease In Shares
Christopher KevaneEVPDec 10-114,0004,000 sharesfrom 0 to 4,000
Jay ParkinsonCFODec 105,00027,500 shares+22.2%
Mark JohnsrudCEONov 29-Dec 11126,2919,626,291 shares+1.3%
Christopher ChisholmEVPDec 113,00018,000 shares+20.0%

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.

MonthInsider buying / sharesInsider selling / shares
December 201338,2910
November 2013100,0000
October 201300
September 201300
August 2013925,0000
July 201300
June 201300
May 201300
April 201300
March 201300
February 201300
January 201300

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.

(click to enlarge)

(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.

(click to enlarge)

(Source: November presentation)

Competition

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

CompanyNESCLHWM
Market Cap:382.89M3.36B20.56B
Employees:2,69813,18043,500
Qtrly Rev Growth (yoy):0.750.700.05
Revenue:600.80M3.19B13.92B
Gross Margin:0.120.280.35
EBITDA:90.64M448.77M3.40B
Operating Margin:-0.030.060.15
Net Income:-214.23M130.64M927.00M
EPS:-9.402.191.98
P/E :N/A25.2322.13
PEG (5 yr expected):-0.062.946.45
P/S:0.621.041.48

Nuverra has the lowest P/S ratio among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
CLH0133,440
WM0174,549

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.

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