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From what we can see, insiders were net sellers in Ecolab Inc.'s (NYSE:ECL ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Ecolab Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Supply Chain Officer, Machiel Duijser, sold US$1.5m worth of shares at a price of US$264 per share. That means that an insider was selling shares at around the current price of US$253. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Machiel Duijser was the only individual insider to sell shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Ecolab
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Ecolab Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Ecolab shares over the last three months. We note Executive VP & Chief Supply Chain Officer Machiel Duijser cashed in US$1.5m worth of shares. On the other hand we note Independent Lead Director David MacLennan bought US$106k worth of shares. Generally this level of net selling might be considered a bit bearish.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Ecolab insiders own 0.1% of the company, worth about US$80m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Ecolab Insider Transactions Indicate?
The stark truth for Ecolab is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Ecolab is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. In terms of investment risks, we've identified 2 warning signs with Ecolab and understanding these should be part of your investment process.