Could Heckmann Corporation (HEK) Be in the Energy Sweet Spot? – Chesapeake Energy Corporation (CHK), Anadarko Petroleum Corporation (APC)

Page 1 of 2

If America were to become energy independent — whether because of new reserves being found, technological innovation that improves efficiency, or people simply cutting down on their consumption — it would be a major change both for our way of life and how we relate to the rest of the world.

Chesapeake Energy (CHK)

But saying that energy independence is as easy as one-two-three, and actually carrying that potential out, are two completely different things.

One of the key drivers to energy independence are the bountiful reserves of both oil and natural gas. These reserves were once inaccessible, but with modern-day fracking techniques, are now more or less open to development.

Take a look at how expansive these reserves are across the United States:

Source: Energy Information Association

But these techniques are not without their drawbacks, especially due to environmental concerns that fracking damages local ecosystems, poisons underground water tables, and may even cause earthquakes.

While the nation’s top pure plays on natural gas extraction — namely Chesapeake Energy Corporation (NYSE:CHK) and Anadarko Petroleum Corporation (NYSE:APC) — would lose profit due to tighter safety standards the government could impose on fracking, there exists a tiny company that could be sitting in the sweet spot between energy independence and environmental stewardship: Heckmann Corporation (NYSE:HEK) .

Read below to see why I would say that, what the company’s latest earnings release revealed, and at the end I’ll offer up access to a special premium report on a major energy company.

Why such a sweet spot?
Earlier this year, I provided a primer on the precarious ground Heckmann occupies. The company has two main divisions: fluids management and recycling.

The fluids management division fulfills the needs of energy extractors, both natural gas companies — like Chesapeake Energy Corporation (NYSE:CHK) and Anadarko Petroleum Corporation (NYSE:APC) – and oil companies. The fracking process itself requires copious amounts of water, and Heckmann has built out an infrastructure of pipelines and natural gas trucks to help meet these basic logistical needs.

The recycling division works to take both water that has oil or other pollutants in it, as well as water that’s been used in the fracking process, and recycle that water so that it is once again useable.

As the debate rages on about the safety of fracking, I contend that Heckmann Corporation (NYSE:HEK) can have it both ways. If the energy companies have their way and fracking is deemed safe, Heckmann already has the infrastructure in place to meet the needs of the industry. If, on the other hand, there are significant safety and environmental requirements that are added to keep fracking legal — but the demand for alternative energy remains strong — Heckmann has an astronomical lead over other water treatment companies like Veolia Environnement SA (ADR) (NYSE:VE) , which is having its own problems navigating debt troubles.

And even though it already had a presence in this niche, Heckmann’s purchase of Power Fuels — a water treatment company with heavy exposure to the booming Bakken Shale in North Dakota — puts it in the driver’s seat for the meeting environmental standards the government may set forth.

What do the numbers say?
But most of what I’ve talked about so far is the story — or the thesis — behind investing in this company. Ideas are one thing, concrete facts are another, and judging by how the market reacted to Heckmann Corporation (NYSE:HEK)’s earnings release, the facts are backing up the story.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!