Energy Solutions (ES)

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Buyers Abound at EnergySolutions
By TERESA RIVAS

Insiders bought $6.1 million in shares of the nuclear-waste handler.

THE ENERGY-SECTOR PULLBACK has burned a number of companies, including EnergySolutions , (ticker: ES) whose shares have lost about a third of their value since the nuclear-waste-handling firm's November initial public offering. But two executives seem to think the selloff has gone too far, and used the weakness to buy $6.1 million in stock the day after it tumbled to a new low.

On Sept. 10 and 11, Chairman and Chief Executive Officer R. Steve Creamer purchased 300,000 shares for $4.6 million, an average of $15.37 a share. He now owns 300,000 shares directly, and 2,300 shares indirectly through his wife.

The buy was Creamer's second, following his 2,300 share-purchase at the company's IPO.

Also on Sept. 10 and 11, Vice Chairman J. I. Everest II purchased 100,000 shares for $1.5 million, an average of $15.35 a share. The purchase was his first since the IPO, and was made through the Everest Family Trust.

Neither executive owns more than 1% of the Salt Lake City-based company. However, both are shareholders of ENV Holdings, which has a 16.7% stake in EnergySolutions.

EnergySolutions did not return phone calls seeking comment on the purchases.

Creamer's and Everest's purchases began the day after EnergySolutions shares dipped to a new 52-week intraday low of $13.41 on Sept. 9. That's less than half the stock's Nov. 15 high of $29.

Year-to-date, the stock is down 30.5%, compared with the 8.3% gain seen by its peers tracked by the Dow Jones Waste & Disposal Services Index.

On Tuesday, the stock gained 37 cents to $15.52.

"In terms of the buy, it's certainly a significant amount of money and a positive sign," says Ben Silverman, director of research for InsiderScore.com.

Silverman notes that it's good to see the insiders stepping up, to remind shareholders of the company's strengths.

"It's not as if the fundamentals here have [deteriorated]," he says. "The company has a relationship with the majority of the nuclear plants in the U.S. and also handles materials from hospitals and manufacturers. So while that business may be impacted to an extent by the economy, it's not consumer-focused."

And there is a chance that the upcoming Presidential election could open up new opportunities for EnergySolutions, though that remains to be seen.

"Both of the candidates say that they believe that nuclear energy is an important part of lessening our oil dependence, but whether or not they do anything about it once they're elected is another story," Silverman says.

The purchases by Creamer and Everest boosted EnergySolutions' Thomson Reuters Insider rating to nine from four on a 10-point scale, with 10 being the most bullish. That score is well above the Waste-Management Industry average of 6.1.

Analysts also seem confident about EnergySolutions. Those surveyed by Thomson on average rated the company at Buy or the equivalent, with a 12-month target price of $24.56.

A week before the insider buys, on Sept. 4, Sterne Agee & Leach analyst Ben Elias initiated coverage of EnergySolutions with a Buy rating and a $23 price target, noting that the company has "a unique asset base and proven ability to provide back-end services."

"EnergySolutions is a beneficiary of aging nuclear infrastructure in the U.S. which requires decommissioning and remediation services," he wrote in a research report. "EnergySolutions is not dependent on the nuclear renaissance, which -- if and when it does occur -- could positively impact the company."