ECOLAB INC.

155.27 +0.67 (+0.43%) Sell

Don't give up on ECL now, it gave a fairly good return

13 min read

ECOLAB INC. is looking better than most other alternatives on Tuesday. It grew by +0.43% to close at 155.27. On a day when the overall market breadth was 35%, it closed higher than 10% of the market. In comparison, the benchmark SP500 index closed today at -0.0004%.

[Themes containing ECL]

ECL showed a flat trend over the last 3 months. During this period ECL returned -0.81% and saw a maximum drawdown of -8.44%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ECL till volatility reduces and a clear trend emerges.

Trend

ECL has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 7 days, ECL outperformed the SP500 index on 53% days.

During the last three months ECL was mostly loss making and delivered on average -0.01% per day. It's best return during this period (of +2.79%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -3.22%) was on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 18 Sep, 2018 and went on till 21 Sep, 2018. The bullish trend returned +2.01% to investors. This was followed by a bearish trend that started on 24 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -1.65% of investor capital.

ECL had 7 profitable and 5 loss making months over the last year. During the last year, ECL underperformed SP500 index on monthly return basis. ECL significantly outperformed SP500 index in Apr 2018, when it returned +8.06% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. ECL had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

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ECL is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in ECL's volatility from 17 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that ECL has significant positive skewness in it's return distribution. This indicates that investors can expect ECL to recover from drawdowns quickly. Which makes ECL a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in ECL derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than ECL. Therefore, SP500 must receive a lower allocation than ECL in your portfolio. SP500 index usually has shorter drawdown period than ECL.

Based on your interest in ECL you may find it interesting to know that ABB and CLX have both performed similar to ECL and can be considered by investors as alternative investment options.

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