Air Products (APD) Scales New 52-Week High at $151.78

Shares of Air Products (APD) reached a new 52-week high of $151.78 on Feb 6, eclipsing the previous high of $151.57. The stock retraced to close the day at $150.32.

The industrial gas giant’s one-year return is roughly 44%, much higher than the S&P 500’s total return of around 18%. Average volume of shares traded over the last three months is roughly 1,163.4K.

Driving Factors

Air Products’ first-quarter fiscal 2015 (ended Dec. 31, 2014) adjusted earnings, reported on Jan 29, topped the Zacks Consensus Estimate. The company saw higher profit in the quarter, supported by increased volumes and pricing.

Air Products, a Zacks Rank #2 (Buy) stock, is benefiting from a diverse customer base, cost-reduction measures and sustained pricing power. New business deals and strategic investments are expected to support results in fiscal 2015.

Given its leading position in the gases business, Air Products is well positioned to capitalize on the cyclical recovery in its core industrial end-markets. The company has built a $3.2 billion project backlog that are expected to be accretive to earnings and cash flow as they come on stream over the next few years.

Air Products is also keeping a tight control on expenses and undertaking work process improvement initiatives. The company remains on track in delivering on its cost reduction programs, which should support its margins in fiscal 2015.

The acquisition of a majority stake in Indura S.A. (South America’s biggest independent industrial gas company) has ushered in substantial growth opportunity for Air Product, placing it as Latin America’s second largest industrial gas producer.

Air Products is also gaining from incremental opportunities in the liquefied natural gas (“LNG”) market. The company has been chosen for a major off-shore LNG project in Malaysia, representing a key milestone for its LNG technology and equipment. Air Products is also supplying its LNG technology and equipment to Technip for a mid-scale LNG project in Inner Mongolia, China.

Air Products has also recently clinched an order to provide its LNG technology and equipment to the Cameron LNG Liquefaction Project in Louisiana, representing the company’s third order for the expanding U.S. LNG export market. The LNG technology is gaining importance as it meets the increasing global need for cleaner energy.

Other Stocks to Consider

Other companies in the chemical industry worth considering include Compass Minerals International Inc. (CMP), Innophos Holdings Inc. (IPHS) and Olin Corp. (OLN) with all holding a Zacks Rank #1 (Strong Buy).