Trade-Ideas LLC identified

Ecolab

(

ECL

) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Ecolab as such a stock due to the following factors:

  • ECL has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 1.06 mentions/day.
  • ECL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $157.1 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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More details on ECL:

Ecolab Inc. provides water, hygiene, and energy technologies and services for customers worldwide. The company operates in four segments: Global Industrial, Global Institutional, Global Energy, and Other. The stock currently has a dividend yield of 1.3%. ECL has a PE ratio of 29. Currently there are 9 analysts that rate Ecolab a buy, no analysts rate it a sell, and 6 rate it a hold.

TST Recommends

The average volume for Ecolab has been 1.3 million shares per day over the past 30 days. Ecolab has a market cap of $31.8 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.12 and a short float of 2.8% with 4.76 days to cover. Shares are down 5.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ecolab as a

buy

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $758.60 million or 23.73% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.09%.
  • The gross profit margin for ECOLAB INC is rather high; currently it is at 53.96%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.48% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 1.00, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, ECOLAB INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • ECOLAB INC's earnings per share declined by 27.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ECOLAB INC increased its bottom line by earning $3.93 versus $3.15 in the prior year. This year, the market expects an improvement in earnings ($4.40 versus $3.93).

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