Yahoo Finance Ecolab Insiders Sold US$2.4m Of Shares Suggesting Hesitancy
The fact that multiple Ecolab Inc. (NYSE:ECL) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Ecolab
The Last 12 Months Of Insider Transactions At Ecolab
Over the last year, we can see that the biggest insider sale was by the CEO & Chairman of the Board, Christophe Beck, for US$1.5m worth of shares, at about US$174 per share. That means that even when the share price was below the current price of US$188, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 14% of Christophe Beck's stake.
All up, insiders sold more shares in Ecolab than they bought, over the last year. The average sell price was around US$171. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At Ecolab Have Sold Stock Recently
We've seen more insider selling than insider buying at Ecolab recently. In that time, insiders dumped US$1.7m worth of shares. On the other hand we note Independent Lead Director David MacLennan bought US$126k worth of shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Ecolab insiders own about US$264m worth of shares (which is 0.5% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Ecolab Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Ecolab, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Ecolab is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Ecolab.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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