Today, I’m re-recommending shares of Energy Recovery (Nasdaq: ERII), a leader in pressure energy technology.
The shares have shot up since I recommended the position in late February. As you may remember, we sold half of the position for a nice 100% gain in April â€” and now the second half has pulled back, putting our position up just over 40%.
And this move gives us the ideal opportunity to add to our stake.
Energy Recovery’s shares have pulled back more than 25% since peaking in mid-April for simply no good reason.
Over the past two months, the company has announced a total of $14 million in new projects and still stands to benefit from its Schlumberger deal, which is set to bring in two additional payments of $25 million each, likely over the course of this year or into early 2017. This chunk of cash will drop directly to the bottom line â€” minus a few taxes â€” because there are no offsetting costs. The money promises to boost the company’s earnings, and will serve as further confirmation that Schlumberger is set to unleash on the shale-oil drilling industry Energy Recovery’s technology. That technology reduces the costs of shale drilling, one of the most expensive oil recovery processes.
You can read the details of this in my original recommendation, which I made in the March report. Click here to read it.
So let’s go ahead and use this temporary pullback as a chance to add to our stake. And if you have yet to buy shares, this is the perfect time to initiate a new position.
Action to take: Buy Energy Recovery (Nasdaq: ERII) up to $9. At last glance, it was trading at $9.
Note: Since the stock’s price is trading around our buy-up-to price of $9, you may wish to place a Good ‘Til Canceled limit order to buy ERII at $9. This tells your broker not to pay more than $9 for the amount of shares you wish to purchase. The order will stay open until it is filled or you cancel it.
Until next time, good investingâ€¦
Jeff D. Opdyke
Editor, Total Wealth Insider