Energy Recovery: 3 Different Insiders Have Purchased Shares This Month

May.30.14 | About: Energy Recovery, (ERII)

Summary

3 insiders purchased Energy Recovery stock within one month.

The stock was sold by no insiders in the month of intensive purchasing.

All 3 of these insiders increased their holdings by more than 10%.

Energy Recovery (NASDAQ:ERII) designs, develops, and manufactures energy recovery devices that transform untapped energy into reusable energy from industrial fluid flows and pressure cycles.

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Insider buying during the last 30 days

Here is a table of Energy Recovery's insider activity during the last 30 days.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Dominique Trempont Director May 13-27 39,566 398,471
shares
+11.0%
Robert Mao Director May 20-21 50,000 57,361 shares +679.3%
Ole Lorentzen 10% Owner May 7 1,000,000 7,199,227 shares +16.1%
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There have been 1,089,566 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Energy Recovery's insider activity by calendar month.

Month Insider buying / shares Insider selling / shares
May 2014 1,089,566 0
April 2014 0 0
March 2014 0 260,000
February 2014 100,000 0
January 2014 0 0
December 2013 0 20,300
November 2013 64,622 0
October 2013 0 0
September 2013 0 0
August 2013 80,800 0
July 2013 0 0
June 2013 0 0
May 2013 57,143 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 30,000
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There have been 1,392,131 shares purchased and there have been 310,300 shares sold by insiders since January 2013. The month of May 2014 has seen the most insider buying.

Financials

Energy Recovery reported the first-quarter financial results on May 7 with the following highlights:

Revenue $3.9 million
Net loss $3.7 million
Cash $19.5 million
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Two of these three insiders purchased their shares after these results.

Competition

Energy Recovery's competitors include Flowserve Corp. (NYSE:FLS), Schlumberger (NYSE:SLB), and Halliburton (NYSE:HAL). Here is a table comparing these companies.

Company ERII FLS SLB HAL
Market Cap: 269.39M 10.19B 135.25B 54.05B
Employees: 118 18,000 123,000 78,000
Qtrly Rev Growth (yoy): -0.39 -0.03 0.06 0.05
Revenue: 40.57M 4.93B 45.94B 29.78B
Gross Margin: 0.62 0.34 0.22 0.15
EBITDA: 1.90M 859.71M 12.38B 6.17B
Operating Margin: -0.05 0.15 0.19 0.14
Net Income: -2.28M 495.49M 7.19B 2.74B
EPS: -0.05 3.53 5.32 3.12
P/E: N/A 21.04 19.52 20.49
PEG (5 yr expected): -8.12 1.34 0.98 0.70
P/S: 6.49 2.07 2.89 1.80
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Energy Recovery has the highest gross margin among these four companies.

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

Company Insider buying / shares Insider selling / shares
FLS 0 153,159
SLB 0 579,806
HAL 0 807,504
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Only Energy Recovery has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Energy Recovery, and there have not been any insiders selling Energy Recovery during the last 30 days. All three of these insiders increased their holdings by more than 10%. Energy Recovery has an insider ownership of 34.39%.

The three insiders purchased their shares at prices ranging from $4.57 to $5.21. I believe Energy Recovery could be a good pick below $5.21 based on the intensive insider buying.

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(Source: Investor presentation)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ERII 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.