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Why Are These Four Insiders Buying Nuverra Environmental Solutions Inc (NES)’s Stock?

Over the past few days, four insiders at Nuverra Environmental Solutions Inc (NYSE:NES), a small-cap environmental solutions company that provides its services to for customers at energy and industrial end-markets, purchased stock from the company:

–          D Mark Johnsrud, Chief Executive Officer, Vice Chairman and owner of more than 10% of the company´s stock, added 26,291 shares to his holdings. He purchased 1,291 shares for an average price of $14.5048 en Dec. 10th, and 25,000 for $14.3729 each, on Dec. 11th. He now owns 9,626,291 shares, valued at more than $141 million.

–          Curtis Jay Parkinson, Executive Vice President and Chief Financial Officer, purchased 5,000 Nuverra Environmental Solutions Inc (NYSE:NES) shares on Dec. 10th, for an average price of $14.23 per share. His holdings now amount to 27,500* shares.

–          Christopher Chisholm, Executive Vice President and Chief Financial Officer of the Fluids Management Division, bought 3,000** shares on Dec. 11th. He paid an average price of $14.4588 per share and now holds a total of 18,000 shares.

–          E. Christopher Kevane, EVP & Chief Legal Officer, started a position in the company this week. He acquired 4,000 shares on two separate transactions on Dec. 10thand 11th. He paid $14.4393 per share and $14.5809 per share, respectively.

Nuverra

In addition to these insiders, hedge funds seem to feel bullish about Nuverra Environmental Solutions Inc (NYSE:NES) too. Although stakes in a company with a market cap of $382 million can’t be very big, a few prominent investors hold long positions in its stock. For instance, Noam Gottesman (Glg Partners) owns 261,809 shares and, although this is nothing compared to Johnsrud’s 9.6 million shares, it does express some confidence in the company’s future. Same goes for Arrowstreet Capital – managed Peter Rathjens, Bruce Clarke and John Campbell – that holds 134,929 shares of the company.

Besides the bullishness that this small-cap company is experiencing, its valuation also makes it an attractive option. Trading at 0.6 times its sales (compared to an industry mean of 1.6x), an alluring entry point seems open at Nuverra Environmental Solutions Inc (NYSE:NES). Analysts expect EPS to grow at a 25% rate each year for the next five, so this stock could certainly provide good value for your money in the long-term.

 

* “This amount includes the receipt of 20,000 shares of common stock upon the vesting of restricted stock granted on September 10, 2012 pursuant to the Issuer’s 2009 Equity Incentive Plan. These 20,000 shares of restricted stock are scheduled to vest 100% on the third anniversary of the date of the grant” (Form 4).

** “This amount includes the receipt of 15,000 shares of common stock upon the vesting of restricted stock granted on November 15, 2011 pursuant to the Issuer’s 2009 Equity Incentive Plan. These 15,000 shares of restricted stock are scheduled to vest 100% on the third anniversary of the date of the grant” (Form 4).

 

Disclosure: Javier Hasse holds no position in any stocks mentioned

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