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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Ditchdigger who wrote (45680)	11/28/2011 10:30:21 AM
From: E_K_S	Read Replies (2) \| Respond to of 78525

Hi Ditchdigger - Heckmann Corporation Common Sto (NYSE: HEK ) The problem with HEK is that they are still losing money and have almost $100M in debt. I do like the fracking infrastructure they have invested in which should pay off in the long term. If there is more strict permitting requirements for fracking effluent there may be some issues with injecting the recovery fluids underground w/o extra filtration/processing. This could provide them an advantage (at an extra cost) because they have the systems in place to capture the waste. Maybe the best value measure is to use their BV @ $2.53/share as the base line for the cost of the assets they have invested to do their business. So they sell for 2.17X BV. I am not too sure what or if their China Water & Drinks division is worth which could be a lot more than their investment in the fracking business. I do like that they are also in the fracking tank rental service. It's very profitable and provides an excellent payback on the asset (sort of like portable toilets). They also make money on the pick-up and disposal of the waste water. Two separate revenue streams. I have this one on my watch list. Based on your posting, they seem to be moving ahead in a big way into developing their fracking services. Lots of trucks, tanks and dedicated pipelines invested in. Any idea what the total amount of water is needed to complete one fracking well? EKS

To: Ditchdigger who wrote (45680)	11/28/2011 7:20:10 PM
From: Sergio H	Read Replies (1) \| Respond to of 78525

Hi Ditch. Where I got lost in doing my dd was with all the acquisitions they made this year and did not get through the disposition of the Chinese water co. With the high PE and high debt, I thought I would look elsewhere. If I had known that you had a position in HEK, I would have responded differently and taken a better look. Spent the day at an aquarium learning about sea life and watched an IMAX movie on the coral reefs. Good to see the market have an up day for a change.