Ecolab, Inc. develops and markets products and services for the hospitality, foodservice, healthcare, and industrial markets. It provides cleaning and sanitizing products and programs, as well as pest elimination, maintenance, and repair services primarily to hotels and restaurants, healthcare and educational facilities, quickservice units, grocery stores, commercial and institutional laundries, light industry, dairy plants and farms, food and beverage processors, and the vehicle wash industry. The company?s products include specialized cleaners and sanitizers for washing dishes, glassware, flatware, foodservice utensils, and kitchen equipment; food safety products and equipment, dishwasher racks, and related kitchen sundries; pool and spa treatment programs; chemical dispensing device systems; cleaning and floor care products; and detergents, general purpose cleaners, carpet care, stone care, furniture polishes, disinfectants, floor care products, hand soaps, and odor counteractants. It also offers general purpose hard surface cleaners, degreasers, sanitizers, polishes, hand care products, and assorted cleaning tools; lubricants and animal health products, as well as cleaning systems, electronic dispensers, and chemical injectors for the application of chemical products; antimicrobial products used in direct contact with meat, poultry, seafood, and produce; process control systems and facility cleaning systems; infection prevention/healthcare products; vehicle appearance products, including soaps, polishes, sealants, wheel and tire treatments, and air fresheners; and water and wastewater treatment products, services, and systems for commercial/institutional customers. In addition, the company provides services for the detection, elimination, and prevention of pests; and commercial cooking and refrigeration equipment repair and maintenance services. The company was founded in 1923 and is headquartered in St. Paul, Minnesota.

Materials Industry Analysis

WikiWealth.com Industry Description: Materials are physical substances used as inputs to production or manufacturing or simply to create something new. Basically, materials are the pieces required to make something else. From buildings and art to computers. A material can be anything: a finished product in its own right or a unprocessed raw material. Raw materials are first extracted or harvested from the earth and divided into a form that can be easily transported and stored, then processed to produce semi-finished materials. These can be input into a new cycle of production and finishing processes to create finished materials, ready for distribution, construction, and consumption… Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: During economic recessions, consumers tend to cut back on spending to save money and businesses tend to cut back on investments. Industrial companies make the products bought by consumers and businesses, but to make those products, industrial companies must get materials. Less spending on goods decreases material business revenue and eventually decreases stock prices. During economic recoveries, consumers and businesses spend quickly to replace or catch up with quickly increasing demand. Material companies quickly receive orders from industrial companies who need to manufacture new products to meet quickly increasing demand. Higher spending increases material business revenue and eventually increases stock prices. During a longer economic expansion, consumer and business demand increases for material companies, but at a slower pace than during the recovery stage.

¹ WikiWealth.com only uses the largest 30 companies in each industry for the basis of these financial measures. Each statistic is the market weighted average of the 30 companies.

² Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.

WikiWealth.com Profit Analysis: The best way to profit from material industry stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). When an economic recovery occurs, material industry stocks tend to outperform the general stock market, because consumers and businesses must increase their inventories quickly to meet demand. Consumers and business delayed purchases on items they wanted, but resisted buying during tougher economic times. Eventually, material company investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell material stocks, because they are likely to decrease in price the fastest. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. For more information on stock research ratings click here.

Inflation Hedge: Changes in commodity prices affect material industry investments. When commodity prices are high due to increased demand or lower supply, material stocks increase, because demand for their goods also increases. Inflation occurs when the price of goods and services increase. The price of materials are generally the first inputs into the production of goods, so changes in material prices directly affect the cost of products, which is measure by inflation. Therefore, a good hedge against inflation is to own material stock investments. When inflation increases, so do the profits of material companies, which may have directly contributed to the increase in prices.

Investment Moats

Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Stock Price Triggers

Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Long Company Description (help)

Ecolab, Inc., is a St. Paul, Minnesota based sanitation supply company founded in 1923. It was named "Economics Laboratory" before its name was changed to Ecolab in 1986 .

The company provides sanitation and pest control supplies, foodservice equipment repair and parts, services and consulting to restaurants, hospitals, food and beverage plants, laundries, schools, retail and commercial properties . With sales of $5.5 billion and more than 26,000 sales-and-service associates, Ecolab Inc. (NYSE: ECL) is the global leader in cleaning, sanitizing, pest elimination, food safety and infection prevention products and services. Ecolab delivers comprehensive programs and services to foodservice, food and beverage processing, healthcare, and hospitality markets in more than 170 countries.

German-based company Henkel owns 29% of its capital . The company stock was a component of the Standard and Poor's 500.

Ecolab has been named one of the “World's Most Ethical Companies” by Ethisphere Magazine. The extensive research process included reviewing over 10,000 of the world's leading companies on six continents. Fewer than 100 companies were chosen for the award.

Ecolab is now ranked #438 in the Fortune 500 magazine, moving up nineteen spots over last year. Ecolab also ranked 228 in terms of market value, 183 on return on sales, 111 for return on total assets, 131 for return on equity and 72 in total return (stock price plus dividends) to shareholders over the ten years ending in 2007.

History

2001 One Ecolab!

A new era in Ecolab history began on Nov. 30, 2001, as the transaction was finalized that officially created one Ecolab in Europe and throughout the world. With sales now exceeding $3 billion and reaching customers in more than 160 countries, Ecolab welcomed more than 4,800 associates in 27 European countries into its growing global organization.

Despite the fact that the hospitality industry faced one of its most challenging periods in its history following the tragic events of Sept. 11, 2001, Ecolab still finished the year outperforming its industry and the broad stock market.

2002 Growth and expansion

Showing its commitment to investment in the new Europe operations, Ecolab expanded its Pest Elimination business to Europe, and increased its overall Food & Beverage business in that region via strategic acquisitions. Ecolab also launched EcoSure Food Safety Management, a business that evaluates food safety procedures in food service and hospitality facilities.

2004 New division created

In order to strengthen Ecolab's service to the growing North American janitorial and healthcare markets, in January 2004 the company separated those two businesses, both of which had previously operated within the Professional Products Division. The newly created Healthcare Division is dedicated to delivering growth in its specialized market. Professional Products, meanwhile, is now focused exclusively on developing opportunities in the janitorial market.

2005 and Beyond The best is yet to come!

There is no doubt in our minds - the best is yet to come!

SWOT Analysis

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