Nuverra Environmental Solutions Inc. (fka NESCQ)

[Hampden]

I think the theme of tomorrow's conference call will be that the price of oil is not so far down, nor expected to be so low, that US energy growth will be adversely affected, nor Nuverra's prospects dampened. Management may even say they've seen no indicators of a slowdown in development.

As for what specific results to expect, I note one significant change from the past pattern. In the last previous 6 quarters, the stock price has always gradually increased over the week preceding the financial reporting date--only to sell off when management disappointed the market. This is the first quarter in some time when that didn't happen, and, in fact, the opposite has occurred, as NES has fallen lower and lower as we approach the day before the announcement. Why is this significant? It means that investors following NES no longer have positive expectations, have already priced-in a weak report, and many have thrown in the towel. If NES reports results at least close to expectations, the market is likely to react by rallying the stock. Also, because of the huge short interest, if there's even a flat to only slight up response, some covering is likely to take place.