6 reasons why staying long in this stock is a bad idea
1) Though it seems like a good idea, the environmental side of the fracking industry and salt water disposal industry is an extremely difficult one to pull off. Not because we don't have the technology, but because we simply do not have the skilled manpower to maintain such specialized equipment. It is wind power and solar power 30 years ago expensive.
2) Heckmann/NES has a lot of diesel trucks. A lot. Is this good or bad? Well let us stop and think about it. A brand new Diesel (And most of their fleet is brand new) Runs about $120,000. Then they outfit most of these trucks to run on Natural Gas. Seems like a good idea right? Yet again, how many mechanics have experience working on Natural gas lines and combustion? It just isn't quite the same. This leads to a skilled mechanic crunch. Something I've been noticing for a while.
3) Salt Water Disposals and pipelines- In my region they came in and bought about 5 saltwater disposal wells (Millions of dollars) Then pipelined them all in (Millions of dollars), then fast forward three years to today. They are having a hell of a time keeping the disposals up and running. Constantly being shut down by violations from the rail road commission or just poor maintenance in general. And let's hope they installed the pipelines correctly, because it runs riiiiiight by a river. That's gonna be a hell of a lawsuit if it ever messes up
4) Speaking of lawsuit, There is a Heckmann/NES truck wrecking every time I turn around. Not just little wrecks but full blown tanker and truck totaled wrecks.
5) Competition- I have 30 years experience in this industry. Dick Heckmann and his group of idiots had no idea what they were doing when they got into this. Key energy and Basic are mopping the floor with Heckmann/NES. Heckmann/NES are having to take certain jobs at a loss just to keep work. That is right, they are performing certain jobs for certain customers AT A LOSS... That's a bad business model.
6)They treat their employees terribly. At least in my region. They have dramatically cut hours, constantly giving their employees the shaft, and even cut wages. Yep...That's going to attract the skilled labor required to run your specialized business.
