Why Heckmann's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of fracking wastewater solution provider Heckmann dropped 10% today on a downgrade from an analyst.

So what: Analyst David Rose from Wedbush downgraded the stock to "underperform" from "neutral" and cut his price target to $2.50. He doesn't think the company will be able to live up to current estimates for 2013 earnings and thinks the stock hasn't fallen in line with competitors.

Now what: Fracking services have taken a hit as the number of rigs running have fallen and companies become more efficient. The company is expected to lose money for 2012 and only return to a slight profit in 2013. I wouldn't sell just based on this downgrade, but fundamentals don't look good, so I'm not buying on the dip, either.

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The article Why Heckmann's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of and has options on Heckmann. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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