Trade-Ideas: Ecolab (ECL) Is Today's New Lifetime High Stock

Trade-Ideas LLC identified Ecolab ( ECL) as a new lifetime high 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 $118.5 million.
  • ECL has traded 4,135 shares today.
  • ECL is trading at a new lifetime high.

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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 three segments: Global Industrial, Global Institutional, and Global Energy. The stock currently has a dividend yield of 1.2%. ECL has a PE ratio of 36. Currently there are 8 analysts that rate Ecolab a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Ecolab has been 1.1 million shares per day over the past 30 days. Ecolab has a market cap of $34.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.10 and a short float of 1.9% with 4.34 days to cover. Shares are up 3.5% year-to-date as of the close of trading on Friday.

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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 and solid stock price performance. 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 significantly increased by 320.00% to $472.50 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 2.10%.
  • The gross profit margin for ECOLAB INC is rather high; currently it is at 54.18%. 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 7.45% trails the industry average.
  • ECOLAB INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ECOLAB INC reported lower earnings of $3.32 versus $3.93 in the prior year. This year, the market expects an improvement in earnings ($4.45 versus $3.32).
  • ECL, with its decline in revenue, slightly underperformed the industry average of 4.1%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • After a year of stock price fluctuations, the net result is that ECL's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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