He became a billionaire in 1987.
That seems like a long time ago.
This man’s tech and business smarts helped him earn more money than most can imagine.
I’m describing Bill Gates, the co-founder of tech stalwart Microsoft.
You may not be surprised that Gates has lots of shares of Microsoft … 103 million of them! At more than $100 a share, that is a solid nest egg…
But he once owned 12 times that many.
He has sold or donated hundreds of millions of shares over the years. Some to fund the foundation he runs with his wife. And some to diversify his holdings. That’s the part we’re interested in.
I was doing a search of the top insider stock buys when I learned about one of the names Gates loves…
How the Rich Get Richer
Following company insiders — directors, officers and large owners — into trades can be quite lucrative.
Insiders have many, many reasons to sell shares. They have many fewer reasons to reach into their own pockets to buy shares, though. The top reason — by far — is to make money.
As such, I like to check Securities and Exchange Commission filings to learn what insiders are up to.
I just reviewed the top five insider purchases over the past three months. These are the winners:
Bill Gates controls Cascade Investment.
St. Paul, Minnesota-based Ecolab Inc. (NYSE: ECL) is the fourth-largest holding of Cascade. It is the only holding of its top 11 it has added to as of the most recent filing.
Ecolab may be the best-performing boring public company. For example, its products are in many of the world’s public restrooms. (Take a look sometime if you haven’t noticed them.)
And that’s just the start. Along with hygiene, it’s also a global leader in water and energy technologies.
It’s not a stretch to say its stuff is everywhere. Its sales are up almost 150% since 2009. Its free cash flow has nearly tripled.
Here is Ecolab’s stock price over the past 30 years. It is one of the prettier charts you’ll see:
The management of Ecolab knows what they are doing.
Bloomberg shows the stock began trading in November 1982. Since then, the Ecolab share price is up 8,907%. The S&P 500 Index is up 1,869% over the same period.
The compounded annual growth rate of the Ecolab price is 13.5% versus 8.7% for the S&P 500. That is huge outperformance over a long period of time.
Make Money Like Bill Gates
Many investors ignore stocks with charts like Ecolab’s. They are often averse to buying things that have been moving higher.
The logic is, if it has already run up this much, it will probably fall back a bit.
However, looking at the above chart, you can see investors should be thankful when there is a drop in Ecolab shares. We haven’t seen many, but shares recovered when we did.
Ecolab’s management has executed the company’s business strategy for a long time.
Some smart people are betting on this to continue … for example, Bill Gates’ investment arm. His investment company currently owns $4.4 billion of Ecolab shares.
I suggest you learn more about this stock … and the company. And if shares fall back closer to where Gates bought in March — between $134 and $135 per share — I recommend you consider joining him as a shareholder.
Good investing,
Brian Christopher
Senior Analyst, Banyan Hill Publishing
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