Air Products & Chemicals (APD, Financial) shares surged by 7.93% recently following the news of a significant activist investment. Mantle Ridge, an investment firm, has acquired over $1 billion in shares and plans to advocate for strategic changes at the company.
Despite Air Products & Chemicals (APD, Financial) showing a positive price movement with its shares currently priced at $308.14, the company has underperformed in comparison to its competitor Linde over the past three years. This underperformance is reflected in a three-year price change of 7.9%, considerably lower than some industry peers.
Air Products & Chemicals (APD, Financial) is currently valued with a Price-to-Earnings (P/E) ratio of 26.7 and a Price-to-Book (P/B) ratio of 4.54. The company's Gross Margin has seen a long-term decline, with an average yearly decline rate of 2.5%. Similarly, the Operating Margin has been decreasing by an average of 2.7% per year over the past five years.
On the positive side, Air Products & Chemicals (APD, Financial) has a strong Altman Z-Score of 3.23, indicating solid financial stability. The company also has a Beneish M-Score of -2.91, which suggests a low likelihood of earnings manipulation. Despite this, the firm's dividend yield is close to a one-year low, and its stock price and Price-to-Sales (P/S) ratio are near two-year highs.
Interestingly, the GF Score for Air Products & Chemicals (APD, Financial) stands at 86, and it is rated as "Modestly Overvalued" according to the GF Value rating, with a GF Value estimate of $267.
Mantle Ridge's investment aims to influence strategic direction, particularly in capital allocation and CEO succession planning, as CEO Seifi Ghasemi's age and recent executive changes have sparked leadership concerns. This movement seems to be a strategic attempt to boost performance and align the company's trajectory with market expectations.
