Looking at Ecolab Inc.'s (NYSE:ECL ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Ecolab Insider Transactions Over The Last Year
The Executive Vice President of Corporate Strategy & Business Development, Angela Busch, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$184 each. That means that an insider was selling shares at slightly below the current price (US$238). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 28% of Angela Busch's stake. Angela Busch was the only individual insider to sell shares in the last twelve months.
Angela Busch divested 7.71k shares over the last 12 months at an average price of US$185. 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!
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Insiders At Ecolab Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Ecolab. We can see that Independent Lead Director David MacLennan paid US$148k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership Of Ecolab
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.1% of Ecolab shares, worth about US$74m. 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 Does This Data Suggest About Ecolab Insiders?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Ecolab, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for Ecolab you should be aware of.
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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 of direct interests only, but not derivative transactions or indirect interests.
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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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