Low-priced stocks are often low-priced for a reason: They have significant problems to overcome. Yet for those that have fixed their problems, they may be ready to take off to the next level.

At Motley Fool CAPS, a "penny stock" is any stock trading under $10, and you'll find some of the best CAPS All-Stars regularly seeking out winning single-digit investments. We identify them with a penny icon, and by pairing up their opinions with some top companies trading for pennies on the dollar, relatively speaking, we may end up with more than just chump change.

Of course, just because a stock is low-priced isn't necessarily enough to suggest it will have an easier time recording big gains. Low-priced stocks are often low-priced for a reason. But this week we look at wastewater-treatment specialist Heckmann (NYSE: HEK), which has seen its shares fall 46% over the past year, to just above $3 a share, but which still garners top honors at CAPS.

Heckmann snapshot

Market Cap $495 million
Revenues, TTM $194 million
Return on Investment (0.8%)
Dividend & Yield NA/NA
Recent Price $3.32
CAPS Rating (out of 5) *****

A broken record
As the natural gas industry becomes more indispensable to our country's energy future, the process of hydraulic fracturing -- or fracking, as it's called -- comes under greater scrutiny. While techniques such as horizontal drilling have opened up vast new resources for drillers, it's been the fracking conducted by Chesapeake Energy (NYSE: CHK), EOG Resources (NYSE: EOG), and others to gain access to gas and oil deposits trapped in rock formations that has caused the most concern.

Drillers pump large amounts of water and other fluids under high pressure 10,000 feet below the surface into the rock, causing it to crack, or fracture. The fluids contain proppants -- sand or ceramic beads such as those made by CARBO Ceramics -- that prop open (hence their name) the fissures, allowing the gas and oil to flow more freely.

According to Heckmann, which supplies the water that drillers use, millions of gallons of water are needed for each hydrofractured well, and environmentalists are worried that it's leading to groundwater contamination. Heckmman says such concerns are misplaced because fracking is occurring so far underground, the chances of contamination are minimal, and besides, water seeps down, not up.

Water, water everywhere
The wastewater generated by the fracking process is then extracted when the oil and gas starts flowing, and Heckmann is responsible for treating it and disposing of it.

Yet the disposal itself is problematic. New Jersey's legislature, for instance, just passed a ban on accepting wastewater generated from fracking because of concerns it contains hydrocarbons and other pollutants, noting that Pennsylvania alone produced 1.3 billion gallons of wastewater byproduct. The effluents are typically disposed of by injecting them into deep, underground injection wells.

Others are concerned the fracking process is leading to more earthquakes, but the U.S. Geological Survey says despite an increase in the number of earthquakes occurring in mid-America, from 21 a year in the decades before 2000 to 134 in 2011, there's no correlation between the increase in quakes and the amount of drilling going on.

No natural high
While the process itself has been a lightning rod for criticism, making an investment in the industry lately a poor one, the economics of natural gas haven't helped, either.

Because natural gas is so plentiful, pricing remains at historic lows, even if they've bounced off the worst levels seen in decades. Yet drillers need to keep servicing their properties, which adds to the inventory issues already at play. While that may bode well down the road when they have to sell the cheap gas they drilled today for higher prices tomorrow, right now it's depressing the industry.

And Heckmann itself faces tough competition from larger rivals like Veolia (NYSE: VE), Siemens (NYSE: SI), and the biggest player in the field, Cameron International, which owns half the market. It's a tough slog ahead.

Out of time
More nettlesome could be new EPA regulations that might pull the punch bowl from the natural gas party. Due to be finished by the end of the year, the regulations could cause the hydraulic fracturing process to grind to a halt. In any event, it would impose new regulations on the watewater flowback generated by the process.

Looked at in its entirety, Heckmann becomes a difficult stock to recommend as an investment, though many analysts are now sizing it up as a potential takeover candidate. But I think the gamut of bad news is priced in, so I've rated the wastewater-treatment specialist to outperform the broad market indexes on CAPS.

Let me know on the Heckmann CAPS page or in the comments box below whether you agree that there's only one way to go from here: up. Add Heckmann's stock to the Fool's free and personalized stock-tracking service to see whether it has a fractured future.

Make some change
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Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Carbo Ceramics, Heckmann, and Chesapeake Energy. Motley Fool newsletter services have recommended buying shares of Veolia Environnement and Chesapeake Energy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.