Ecolab (ECL) Highlighted As Strong And Under The Radar Stock Of The Day

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Ecolab ( ECL) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Ecolab as such a stock due to the following factors:

  • ECL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $79.8 million.
  • ECL is making at least a new 3-day high.
  • ECL has a PE ratio of 32.2.
  • ECL is mentioned 1.29 times per day on StockTwits.
  • ECL has not yet been mentioned on StockTwits today.
  • ECL is currently in the upper 20% of its 1-year range.
  • ECL is in the upper 35% of its 20-day range.
  • ECL is in the upper 45% of its 5-day range.
  • ECL is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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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%. ECL has a PE ratio of 32.2. Currently there are 11 analysts that rate Ecolab a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Ecolab has been 785,900 shares per day over the past 30 days. Ecolab has a market cap of $34.5 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.78 and a short float of 1.1% with 5.58 days to cover. Shares are up 11.4% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ecolab as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • ECOLAB INC has improved earnings per share by 47.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ECOLAB INC increased its bottom line by earning $3.15 versus $2.36 in the prior year. This year, the market expects an improvement in earnings ($4.19 versus $3.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 46.1% when compared to the same quarter one year prior, rising from $213.10 million to $311.40 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 53.38% to $317.50 million when compared to the same quarter last year. In addition, ECOLAB INC has also vastly surpassed the industry average cash flow growth rate of -14.52%.
  • The gross profit margin for ECOLAB INC is rather high; currently it is at 52.58%. 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 8.72% trails the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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