This trade activity should not be overlooked: Ecolab Inc. (ECL)

Ecolab Inc. (NYSE: ECL) stock fell -3.02% on Friday to $151.80 against a previous-day closing price of $156.52. With 1.39 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.09 million shares. During the session, the Specialty Chemicals company that operates in wider Basic Materials sector, reached to the highest price of $158.62 whereas the lowest price it dropped to was $151.70. The 52-week range on ECL shows that it touched its highest point at $238.93 and its lowest point at $143.82 during that stretch. It currently has a 1-year price target of $179.79. With its current market cap of 44.41 billion, ECL has annualized dividend of $2.04 while the current yield stands at 1.34%. Beta for the stock currently stands at 1.01.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ECL was down-trending over the past week, with a drop of -7.80%, but this was down by -10.25% over a month. Three-month performance surged to 0.37% while six-month performance fell -13.92%. The stock lost -30.34% in the past year, while it has lost -35.29% so far this year. A look at the trailing 12-month EPS for ECL yields 3.83 with Next year EPS estimates of 5.81. For the next quarter, that number is 1.32. This implies an EPS growth rate of 15.90% for this year and 22.06% for next year. EPS is expected to grow by 12.09% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -1.20%.

Float and Shares Shorts:

At present, 285.10 million ECL shares are outstanding with a float of 282.08 million shares on hand for trading. On Aug 30, 2022, short shares totaled 2.9 million, which was 1.02% higher than short shares on Jul 28, 2022. In addition to Mr. Christophe Beck as the firm’s Pres, CEO & Chairman, Mr. Daniel J. Schmechel serves as its Exec. Officer.

Institutional Ownership:

Through their ownership of 90.18% of ECL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 42.90% of ECL, in contrast to 37.79% held by mutual funds. Shares owned by individuals account for 35.78%. As the largest shareholder in ECL with 7.34% of the stake, The Vanguard Group, Inc. holds 20,918,797 shares worth 20,918,797. A second-largest stockholder of ECL, BlackRock Fund Advisors, holds 11,961,892 shares, controlling over 4.20% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in ECL, holding 11,544,497 shares or 4.05% stake. With a 2.77% stake in ECL, the Vanguard Dividend Growth Fund is the largest stakeholder. A total of 7,904,944 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.67% of ECL stock, is the second-largest Mutual Fund holder. It holds 7,614,175 shares valued at 1.25 billion. Vanguard 500 Index Fund holds 1.95% of the stake in ECL, owning 5,545,696 shares worth 908.55 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, ECL reported revenue of $3.58B and operating income of $429.40M. Over the past year, revenue came in at $13.53B while operating income stood at $1.53B. It generated $308.30M net income for the quarter, which came to $1.11B over the last twelve months. The EBITDA in the recently reported quarter was $684.90M and diluted EPS was $1.08. EBITDA for the full year was $2.59B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ECL since 25 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 13 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ECL analysts setting a high price target of $198.00 and a low target of $163.00, the average target price over the next 12 months is $179.79. Based on these targets, ECL could surge 30.43% to reach the target high and rise by 7.38% to reach the target low. Reaching the average price target will result in a growth of 18.44% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ECL will report FY 2022 earnings on 02/21/2023. Analysts have provided yearly estimates in a range of $4.85 being high and $4.62 being low. For ECL, this leads to a yearly average estimate of $4.76. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Ecolab Inc. surprised analysts by $0.01 when it reported $1.10 EPS against a consensus estimate of $1.09. The surprise factor in the prior quarter was -$0.01. Based on analyst estimates, the high estimate for the next quarter is $1.38 and the low estimate is $1.28. The average estimate for the next quarter is thus $1.32.

Summary of Insider Activity:

Insiders traded ECL stock several times over the past three months with 38 Buys and 3 Sells. In these transactions, 508,585 shares were bought while 8,700 shares were sold. The number of buy transactions has increased to 115 while that of sell transactions has risen to 41 over the past year. The total number of shares bought during that period was 734,117 while 201,821 shares were sold.

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