APD (Update)
Air Products and Chemicals Inc.
Industrial/Transportation
10/11/2013
Presented
| Date | 10/08/2013 |
| Price | $104.62 |
| Market Cap | $21.90B |
| Ent Value | $28.16B |
| P/E Ratio | 32.45x |
| Book Value | $34.31 |
| Div Yield | 1.9% |
| Shares O/S | 209.65M |
| Ave Daily Vol | 1,750,000 |
| Short Int | 1.50% |
Current
| Price | $323.23 |
| Market Cap | $71.86B |
| Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. The company’s Merchant Gases segment sells atmospheric gases, such as oxygen, nitrogen, and argon; process gases, including hydrogen and helium; and medical and specialty gases for the metal, glass, chemical processing, food processing, healthcare, steel, general manufacturing, and petroleum and natural gas industries. Its Tonnage Gases segment provides hydrogen, carbon monoxide, nitrogen, oxygen, and synthesis to the energy production and refining, chemical, and metallurgical industries; and produces Polyurethane Intermediates. The company’s Electronics and Performance Materials segment offers nitrogen trifluoride, silane, arsine, phosphine, white ammonia, silicon tetrafluoride, carbon tetrafluoride, hexafluoromethane, critical etch gases, and tungsten hexafluoride; and tonnage gases, specialty chemicals, and services and equipment for the manufacture of silicon and compound semiconductors, thin film transistor liquid crystal displays, and photovoltaic devices. This segment also provides performance materials for a range of products, including coatings, inks, adhesives, civil engineering, personal care, institutional and industrial cleaning, mining, oil refining, and polyurethanes. Its Equipment and Energy segment designs and manufactures cryogenic equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and helium distribution; and offers plant design, engineering, procurement, and construction management services for the chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing industries. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania. |
Please note, this is an update to LONG - Air Products and Chemicals, Inc. (APD) which was originally presented on September 17, 2013.
Highlights
The presenter quickly reviewed the background on Air Products (APD), including: Pershing Square’s activist stake (10% of the outstanding shares), and the basic, solid fundamental nature of the industrial gas business (long-term take-or-pay contracts, consistent margins on GDP+ growth, oligopolistic structure, etc.). Since the presentation, it was announced that APD’s President, Chairman and CEO John McGlade will be retiring in 2014 and the company has begun the search for a new CEO, and three new independent directors will be added to the board. Clearly Mr. Ackman was able to get the point across as the deadline was October 28th, and this announcement was made on September 26th. APD’s shares are not reflecting the potential improvement in valuation following this most favorable development, and have surprisingly dropped ~7% since the end of September. The presenter views this decline as a gift because the fundamental basis for APD’s stock being worth as much as $165 has not changed.
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