There are a lot of reasons to buy a stock. It might pay a large dividend or it's trading at an incredible bargain. That being said, there is always an underlying business that an investor is buying anytime a share of stock is purchased. With that in mind, when investors buy shares of Nuverra Environmental Solutions (NESC) what are they really buying?

Jockey play
Nuverra's predecessor company was started by Richard Heckmann who has a history of building companies from scratch and then flipping them to the highest bidder. One of the main attractions to Nuverra are the strong odds that he can do that again with his latest venture. Basically, an investment in Nuverra is one with the thought that one day it will end up being sold to a much larger oil-field service company.

The company has a long way to go before that day arrives. That's why last year's merger of Heckmann with Bakken focused Power Fuels, served two main purposes. First, it added the high growth oil focused Bakken to its platform, but more importantly it added current CEO Mark Johnsrud. In making that move Richard Heckmann was able to turn over the day-to-day control of the company over to someone who knew how to run an oil-field service company. That move freed up Heckmann's time to focus on strategically building the company from the top, while Johnsrud focused on building it from the bottom.

Pure play on pure water
Nuverra differentiates itself from its competitors by offering energy companies a complete environmental solution surrounding the water used for fracking. This includes transporting the water to the site, collecting produced water, treating and recycling what it can and then disposing of the remains. It's the only company purely focused on this process with the scale to take it across multiple shale basins.

Many of its potential customers handle water internally by either investing capital to recycle or dispose of the produced water. For example, Devon Energy (DVN -0.89%) built a water recycling facility in Oklahoma to support the development of the Cana-Woodford Shale. Devon has been able to save five million barrels of freshwater in the first nine months of this project. Nuverra does have its own water recycling facility, which it uses to serve customers in the Marcellus. This saves them from the large up-front capital required to build a water recycling plant like Devon's.

The other option for producers is to simply dispose of the leftover frack water. This is how SandRidge Energy (NYSE: SD) has handled its water problem as it continues the development of the Mississippi Lime. This has saved it from hiring a company like Nuverra to truck the water away. However, it still has cost the company more than $530 million to drill over 130 wells and lay 850 miles of disposal pipeline. Nuverra has 56 disposal wells of its own spread around the country. These save its customers from having to join SandRidge Energy in spending capital on a salt water disposal system that could have been spent on drilling oil and gas wells.

Emerging growth opportunity
The energy wastewater business is still emerging and Nuverra has the opportunity to consolidate its way to the top. The company is always snapping up smaller competitors as it continues to build scale. Already this year it has purchased smaller rivals in both the Marcellus and Utica shale plays. Looking ahead, Nuverra could also someday end up buying up the assets that Devon, SandRidge and others have built relating to water recycling and disposal.

In addition to this, Nuverra has an emerging opportunity with Halliburton (HAL 0.34%) involving the company's H20 Forward service. Nuverra is serving as Halliburton's logistical partner on the process and sees its role being that of owning and operating a centralized treatment facility. With Halliburton's goal to see the industry recycle a quarter of its water usage in the year ahead, it points to a really large opportunity for Nuverra to expand.

Investor takeaway
At the end of the day an investment in Nuverra boils down to three things: Management, water and growth. The company has an experienced management team that's pursuing an emerging growth opportunity. So, for inventors that want a pure-play on purifying the water and the image of fracking, Nuverra is the company to buy.