April 18, 2024
Top 10 Stock Ecolab Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Ecolab – Top 10 Stock in SDG 6: Clean Water and Sanitation
Ecolab is listed as a top 10 stock on April 18, 2024 in the market index SDG 6 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for Ecolab on April 18, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Specialty Chemicals |
| Index | IPSA, Employee Focus US, Diversity USA, Human Rights, SDG 13, SDG 5, SDG 6, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Ecolab Hold
| 360 METRICS | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 8 |
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| GROWTH | ||||||||
| GROWTH | 84 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock Ecolab are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Ecolab. The consolidated Growth Rank has a good rank of 84, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 84% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 63, which means that professional investors are more optimistic about the stock than for 63% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 8, which means that the share price of Ecolab is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 92% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 23, which means that the company has a financing structure that is riskier than those of 77% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 26, Ecolab is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 84), and professional market sentiment is positive (Sentiment Rank of 63), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Ecolab positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Ecolab is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Ecolab. Analyst Opinions are at a rank of 33 (worse than 67% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Ecolab. Even better, the Professional Investors rank is 79, meaning that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 70, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 70% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Ecolab has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Ecolab Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), Ecolab shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Ecolab. Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Ecolab's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 9, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Ecolab. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 71% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on Ecolab's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Ecolab? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Ecolab? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Ecolab may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Ecolab Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 84 (better than 84% compared with alternatives) for 2024, Ecolab shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Ecolab. Profit Growth has a rank of 79 which means that currently professionals expect the company to grow its profits more than 79% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 62, and Stock Returns has a rank of 92 which means that the stock returns have recently been above 92% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 45 (55% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 84, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Ecolab Debt Financing Safety risky
| SAFETY METRICS | April 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 15 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 67 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
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ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company Ecolab has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Ecolab is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Ecolab. Liquidity is at 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 15, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 85% of its competitors. Leverage is also high at a rank of 38, which means that the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), Ecolab has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Ecolab Lowest Financial Performance
| COMBINED PERFORMANCE | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 8 |
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| GROWTH | ||||||||
| GROWTH | 84 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| COMBINED | ||||||||
| COMBINED | 21 |
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ANALYSIS: With an Obermatt Combined Rank of 21 (worse than 79% compared with investment alternatives), Ecolab (Specialty Chemicals, USA) shares have lower financial characteristics compared with similar stocks. Shares of Ecolab are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives), and are riskily financed (Safety Rank of 23, which means above-average debt burdens) but show above-average growth (Growth Rank of 84). ...read more
RECOMMENDATION: A Combined Rank of 21, is a sell recommendation based on Ecolab's financial characteristics. As the company Ecolab shows low value with an Obermatt Value Rank of 8 (92% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 84% of comparable companies (Obermatt Growth Rank is 84). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 23 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Ecolab, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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