PowerRatings Stock Spotlight: Ecolab

The green movement is definitely taking hold around the world. Consumers and businesses are becoming more and more aware of their impact on the earth. Drastic measures have been taken to lessen industrial man's negative effect on the environment. Not only is the green movement a big positive for our future, it has become a major factor in how business is done. In fact, it has become a big business in and of itself.

This week's spotlight company has a serious focus on sustainability and is a leader in the green space. The company is the well known firm, Ecolab (ECL | Quote | Chart | News | PowerRating), a global cleaning product and chemical company. When checking the company out for a possible investment, my first step was to look at the Long Term PowerRatings. I was pleased to see that it was just upgraded from an 8 to a 9 rank. This is the second highest rating available.

For those of you not familiar with our Long Term PowerRatings, it is an easy to use, dynamic stock decision making tool based on 13 years of extensive, statistically significant studies, across most market environments. Our research has clearly shown that stocks that earn a 10 rating have an 81% chance of trading higher. Those possessing a 9 rating have a 79.1% chance of trading higher and so on down the scale to 1. In this volatile, uncertain market environment, allow Long Term PowerRatings to assist you in building a profitable and safe portfolio.

Ecolab was formed in 1923 by a twist of fate. Henry Ford drove the struggling auto dealer, Merritt Osbourne, out of business forcing him to look into other businesses to survive. He quickly invented a carpet cleaning product named Absorbit enabling hotels to clean their carpets without closing down the hallways. The company was first called Economic Laboratories, and eventually shortened to Ecolab. I doubt Mr. Osbourne foresaw the Eco having the double meaning of both ecological and economical when he came up with the name. Another positive twist of fate for the company.

After almost going under in the great depression, the company continued to grow and invent new products. Today they deliver comprehensive programs and services to the health care, hospitality, food services and beverage markets in over 160 countries. They are a $6 billion dollar company with over 26000 employees worldwide. The company continues to innovate with a strong focus on staying green and sustainability which should serve it well into the future. They delivered results at the upper end of the forecasts for the second quarter although sales were down 8% due to currency conversions.

In addition, net income was down 29% and net earnings were down 25%. Despite the quarters downturn, shares have been uptrending since May 18th and are trading above both the 50 and 200-day SMAs. Resistance was hit at $43.00/share.

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David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.