Insider Weekends: Bill Gates Adds to His Stake in Ecolab

When working through the list of insider purchases and sales each week, we tend to remove transactions by 10% owners that are not part of the management team and that don’t have representation on the Board of Directors. This week, we decided to make an exception to highlight a purchase of Ecolab (ECLby Cascade Investment LLC, which is the private investment firm that manages Bill Gates’ wealth. Cascade has been the largest shareholder of Ecolab since 2011 and their last purchase was in March 2018.

Ecolab, a company with annual sales of $13 billion and more than 47,000 employees, provides water, hygiene and infection prevention solutions through hundreds of products that can range from commercial dishwashing machines to cleanroom disinfectants. The company has been paying a dividend for 85 consecutive years and currently yields 1.2% with a 44% payout ratio. Ecolab was hit hard during the pandemic with multiple quarters of double digit revenue declines. The company has recovered since then with revenue growing 13.21% last quarter but neither revenue nor earning are back to pre-pandemic levels. In fact, both gross margins and earnings have taken a hit in recent quarters on account on inflation. Trading at a forward P/E of 36, it is surprising to see to Cascade buy more of Ecolab after not adding to their stake for more than four years.

The bigger news with insider transactions last week was Ryan Cohen deciding to sell his entire stake in Bed, Bath & Beyond Inc. (BBBY) after a very big jump in the money losing company’s stock. I wrote the following about Gamestop and Mr. Cohen in our Return of the Meme Stocks article earlier this year,

In a re-run of a movie we have seen before, the “meme stocks” GameStop (GME)  and AMC Entertainment (AMC) saw their stocks surge last week with GameStop registering a gain of over 67% for the week and AMC delivering gains of 28% in a single week. While three different insiders of GameStop purchased shares as discussed below, AMC saw continued insider selling.

The billionaire founder of online pet retailer Chewy, Ryan Cohen, became the chairman of GameStop in April 2021 and brought along other Chewy executives and investors to join the GameStop board. Alain Attal, who purchased 1,500 shares of GameStop was previously the Chief Marketing Officer of Chewy. Lawrence Cheng, a Managing Partner of Volition Capital, purchased 4,000 shares of GameStop. Volition Capital was an early investor in Chewy, putting $15 million into the company after Ryan Cohen was rejected by over 100 venture capital firms. Chewy sold to PetSmart in April 2017 for $3.35 billion.

GameStop became popular on Reddit boards during the pandemic and a short squeeze ensued that saw the stock jump from around $4 in the summer of 2020 to nearly $400 in early 2021. The stock eventually came down to earth but remains elevated on any fundamental or valuation metric one can imagine.

We remain short GameStop in the InsideArbitrage model portfolio and I think this action in Bed, Bath & Beyond is going to have a negative impact on GameStop as well.

Welcome to edition 633 of Insider Weekends. Insider buying increased last week with insiders purchasing $324.01 million of stock compared to $212.22 million in the week prior. Selling on the other hand decreased to $1.64 billion compared to $9.06 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last dropped to 5.06. In other words, insiders sold more than 5 times as much stock as they purchased. The Sell/Buy ratio this week was favorable compared to the prior week when the ratio stood at 42.71.

Notable Insider Buys:

1. Ecolab Inc. (ECL): $171.78

10% Owner William H. Gates III acquired 441,333 shares of this global provider of water, hygiene and energy technologies and services to the food, energy, healthcare, industrial and hospitality markets, paying $174.19 per share for a total amount of $76.87 million. These shares were purchased indirectly by by Cascade Investment, L.L.C.

You can view the list of recent insider transactions for Ecolab Inc. here.

P/E: 44.85 Forward P/E: 29.57 Industry P/E: 12.81
P/S: 3.62 Price/Book: 6.9 EV/EBITDA: 21.28
Market Cap: $48.96B Avg. Daily Volume: 1,142,124 52 Week Range: $143.82 – $238.93

2. DISH Network Corporation (DISH): $18.39

Director James DeFranco acquired 160,373 shares of DISH Network, paying $18.53 per share for a total amount of $2.97 million. These shares were purchased indirectly by a limited liability company.

You can view the list of recent insider transactions for DISH Network Corporation here.

P/E: 5.99 Forward P/E: 13.04 Industry P/E: 17.05
P/S: 0.56 Price/Book: 0.59 EV/EBITDA: 9.19
Market Cap: $9.75B Avg. Daily Volume: 3,755,703 52 Week Range: $16.2 – $46.31

3. American Assets Trust, Inc. (AAT): $29.69

Chairman & CEO Ernest S. Rady acquired 84,371 shares of this diversified REIT, paying $30.16 per share for a total amount of $2.54 million. These shares were purchased indirectly by a trust.

You can view the list of recent insider transactions for American Assets Trust, Inc. here.

P/E: 45.68 Forward P/E: 43.03 Industry P/E: 33.95
P/S: 5.66 Price/Book: 1.46 EV/EBITDA: 14.72
Market Cap: $2.28B Avg. Daily Volume: 232,033 52 Week Range: $28.38 – $40.83

4. Cassava Sciences, Inc. (SAVA): $25.58

Shares of this biotech company were acquired by 2 insiders:

  • Director Sanford Robertson acquired 100,000 shares, paying $20.69 per share for a total amount of $2.07 million. Mr. Robertson increased his stake by 10.81% to 1,024,765 shares with this purchase.
  • Chief Financial Officer Eric Schoen acquired 2,500 shares, paying $19.95 per share for a total amount of $49,875. Mr. Schoen increased his stake by 14.45% to 19,800 shares with this purchase.

You can view the list of recent insider transactions for Cassava Sciences, Inc. here.

P/E: N/A Forward P/E: -19.98 Industry P/E: 26.68
P/S: N/A Price/Book: 4.7 EV/EBITDA: -14.22
Market Cap: $1.03B Avg. Daily Volume: 2,352,633 52 Week Range: $13.84 – $123.37

5. BitNile Holdings, Inc. (NILE): $0.315

Executive Chairman Milton C. Ault III acquired 3,973,306 shares of this cryptocurrency and digital finance company, paying $0.36 per share for a total amount of $1.44 million.

You can view the list of recent insider transactions for BitNile Holdings, Inc. here.

P/E: N/A Forward P/E: -31.5 Industry P/E: 19.9
P/S: 1.44 Price/Book: 0.23 EV/EBITDA: -17.49
Market Cap: $103.8M Avg. Daily Volume: 12,004,698 52 Week Range: $0.23 – $2.95

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Walmart Inc. (WMT): $137.02

Director Robson S. Walton sold 1,452,811 shares of Walmart for $139.50, generating $202.66 million from the sale. These shares were sold indirectly by a trust.

You can view the list of recent insider transactions for Walmart Inc. here.

P/E: 27.4 Forward P/E: 19.66 Industry P/E: 21.32
P/S: 0.64 Price/Book: 4.83 EV/EBITDA: 12.56
Market Cap: $375.59B Avg. Daily Volume: 8,917,633 52 Week Range: $117.27 – $160.77

2. Bed Bath & Beyond Inc. (BBBY): $11.03

Shares of Bed Bath & Beyond were sold by 2 insiders:

  • 10% Owner Ryan Cohen sold 5,000,000 shares for $21.17, generating $105.85 million from the sale. These shares were sold indirectly by RC Ventures LLC.
  • EVP, CFO Gustavo Arnal sold 55,013 shares for $25.52, generating $1.4 million from the sale.

You can view the list of recent insider transactions for Bed Bath & Beyond Inc. here.

P/E: N/A Forward P/E: -3.33 Industry P/E: 13.66
P/S: 0.12 Price/Book: N/A EV/EBITDA: -51.73
Market Cap: $881.93M Avg. Daily Volume: 33,133,372 52 Week Range: $4.38 – $30.14

3. Rollins, Inc. (ROL): $36.54

Shares of this pest and wildlife control services provider were sold by 2 insiders:

  • Chairman and CEO Gary W. Rollins sold 1,565,073 shares for $37.13, generating $58.11 million from the sale. These shares were sold indirectly by Rollins Holding Company.
  • Interim CFO and Treasurer Julie Korioth Bimmerman sold 312 shares for $37.09, generating $11,572 from the sale.

You can view the list of recent insider transactions for Rollins, Inc. here.

P/E: 55.36 Forward P/E: 45.11 Industry P/E: 19.90
P/S: 7.17 Price/Book: 15.71 EV/EBITDA: 33.86
Market Cap: $18.31B Avg. Daily Volume: 1,567,080 52 Week Range: $28.51 – $40.11

4. KLA Corporation (KLAC): $371.81

President and CEO Richard P. Wallace sold 74,314 shares of this semiconductor equipment & materials company for $382.53, generating $28.43 million from the sale.

You can view the list of recent insider transactions for KLA Corporation here.

P/E: 17.11 Forward P/E: 15.67 Industry P/E: 25.14
P/S: 5.88 Price/Book: 37.63 EV/EBITDA: 14.14
Market Cap: $54.17B Avg. Daily Volume: 1,403,500 52 Week Range: $282.83 – $457.12

5. Grocery Outlet Holding Corp. (GO): $42.08

Shares of this independently operated stores chain were sold by 6 insiders:

  • Chief Executive Officer Eric J. Lindberg Jr. sold 340,554 shares for $40.52, generating $13.8 million from the sale. 300,000 of these shares were sold indirectly through a trust and 25,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Director Norman S. Matthews sold 50,000 shares for $42.20, generating $2.11 million from the sale.
  • Chief Financial Officer Charles Bracher sold 29,061 shares for $41.67, generating $1.21 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Jeffrey York sold 25,000 shares for $42.22, generating $1.06 million from the sale.
  • SVP, Chief Store Development Officer Brian McAndrews sold 22,763 shares for $42.10, generating $958,246 from the sale.
  • These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Thomas F. Herman sold 2,000 shares for $41.63, generating $83,250 from the sale.

You can view the list of recent insider transactions for Grocery Outlet Holding Corp. here.

P/E: 72.55 Forward P/E: 35.66 Industry P/E: 21.32
P/S: 1.24 Price/Book: 3.86 EV/EBITDA: 33.1
Market Cap: $4.08B Avg. Daily Volume: 1,192,361 52 Week Range: $21.01 – $46.37

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer: Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

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