Is Ecolab Inc. (ECL) the best stock in Bill Gates’ portfolio right now?

On December 19, 2024By Littum

We have recently compiled a list of Bill Gates Stock Portfolio: Latest 2024 Update. In this article, we will take a look at where Ecolab Inc. (NYSE:ECL) faces the other stocks in Bill Gates’ portfolio.

Bill Gates is one of the most consistent people in the modern world. His software company, known for selling the Windows operating system, is among the most valuable companies in the world thanks to its market cap of $3.30 trillion. This company has made Gates one of the richest people in the world, with his net worth estimated at $108 billion according to recent estimates.

The software billionaire retired from his company in 2014, but he hasn’t stopped making an impact after retirement. Instead of quietly disappearing into the distance, Gates focused his efforts on causes and initiatives he is passionate about. Climate change, human health and technology remain his key interests, and Gates targets these areas directly through his family office and indirectly through Bill and Melinda Gates Foundation.

Although it’s the foundation that is often the center of media attention when it comes to Gates’ investments, the billionaire also invests through his family offices Cascade Investment, LLC and Gates Frontier, LLC. Based on Cascade Investment, the firm has had a moderately busy 2024. It started the year by revealing a significant stake (23.7% of ordinary shares) in a megacar company with presence in the US, Mexico and Brazil. This stock is up 30% year-to-date in an auto market that has slowed, accompanied by a weaker discretionary spending environment due to high interest rates and inflation.

Cascade Investment reported owning a 22% stake in this company on February 13, and the disclosure came just in time. This was because the company reported its earnings for the second fiscal quarter just five days later. The results sent the stock up 8.7% as the company benefited from higher auto prices, leading to greater demand for its products. The company’s turnover and earnings per stock in the second quarter of $3.86 billion and $28.89, beating analyst estimates of $3.84 billion and $26.28. By the end of July, Cascade’s stake grew to 24.9%, and since then the auto parts maker’s stock has risen 5.6%.

Bill Gates’ second disclosure of investments through Cascade came in October, when the firm said it owned a 7.1% stake in a diversified company that sells electricity and plastic products such as pipes and also provides contract manufacturing services. The stock is down 7.4% year-to-date, but since Gates’ filing, it’s up 1.8%. It is also one of Gates’ oldest investments, with the billionaire holding a stake in it as early as 2000. It is also one of his most controversial plays, as the company generates electricity through conventional and polluting energy sources.

While Gates continues to hold shares in the utility company and auto parts provider, Cascade Investments has also been busy selling one share. All its sales started at the end of October and have continued since then. The company is selling a specialty chemicals business that caters to the water treatment and other related needs of the waste treatment, semiconductor manufacturing, pharmaceutical and other industries. Shares were up 2.74% year-to-date before Gates’ initial sale, and have since lost 0.90%. Interestingly, this stock also ranked 16 on our list of Wells Fargo’s Best Growth Stocks: 28 stocks with the highest consensus EPS growth estimates. Being an industrial stock, its fortunes depend on broader US economic activity, which also made it unsurprising that stocks

These three stocks are the ones that have seen activity from Gates’ firm Cascade Investment. However, they are not the only ones that the billionaire has tinkered with this year. Gates’ other investment company, Gates Frontier, also unveiled perhaps the most interesting stock of this introduction in February. This stock is operating in one of the hottest industries right now. Shares are up 32% year-to-date, and the firm claims its robotics technology “uses proprietary humanoid surgical robots to virtually transport surgeons inside the patient to perform minimally invasive surgery.” The company’s V1.0 surgical robot is currently scheduled to be submitted to the FDA for approval in mid-2026. Since the company does not sell any products, it also generates no revenue. Therefore, it is a very risky game and Gates probably has invested in it to fund a new technology that may also end up making him money.

Our method

To create our list of the latest stocks in Bill Gates’ portfolio, we reviewed the Bill & Melinda Gates Foundation’s third-quarter SEC filings and selected the top ten stocks with the highest investment returns.

For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds are piling into? The reason is simple: our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A technician wearing a protective suit in a water treatment plant.

Bill & Melinda Gates Foundation’s investment effort: $1.3 billion

Number of Hedge Fund investors in Q3 2024: 47

Ecolab Inc. (NYSE:ECL) is the specialty chemicals water treatment company we mentioned in our introduction. While the Gates family office sold the shares this year, the fund has not sold any shares in Ecolab Inc. (NYSE:ECL). activity that does not bode well for industrial companies. But as broader economic activity has been muted for more than a year due to two decades of high interest rates, Ecolab Inc. (NYSE:ECL) to take advantage of pent-up demand. The potential release of demand was evident in the company’s third-quarter earnings, where its global industrial revenue grew $1.99 billion, or by 2.6% annually. The growth occurred despite the fact that while the US economy has managed to stave off a sharp downturn, other countries have not been so lucky. Another key factor that will drive Ecolab Inc. (NYSE:ECL) going forward, are customer inventories. They will provide insight into whether its customers are experiencing higher activity to begin building inventory for an anticipated increase in activity.

Ecolab Inc. (NYSE:ECL)’s management shared its future growth plans below Q3 2024 earnings call. Here’s what they said:

“Now, I’d like to shift our attention from Q3 to what our teams are focused on to drive long-term growth and margin expansion. Our growth engines in clean tech, high tech and biotech are showing strength and momentum, even though they are each at different stages of development.

Total ECL ranks 7 on our list of the stocks in Bill Gates’ portfolio. While we recognize the potential of ECL as an investment, our conviction lies in the belief that AI stocks hold greater promise to deliver higher returns and do so within a shorter time frame. If you’re looking for an AI stock that’s more promising than ECL but trades at less than 5 times its earnings, check out our report on cheapest AI stock.

Publication: No. This article was originally published on Insider monkey.