Insider Activity: Air Products & Chemicals (APD)

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  • CEO makes $4.5 million buy.

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  • On Friday July 26th, Air Products & Chemicals (APD) CEO Seifi Ghasemi picked up 20,000 shares of the company. At $227 per share, the total cost came to a whopping $4.5 million bet on the company. The new buy brings his total share count to nearly 454,000 shares.

    This marks the first insider buy at the company for 2019, and only one insider has sold shares at the industrial giant this year.

    Air Products & Chemicals provides atmospheric gases, process and specialty gases, and related equipment and services worldwide. That includes products like oxygen, nitrogen, argon, helium, rare gases, and other gases for industries such as refining, electronics, manufacturing, and others.

    Although earnings growth has barely nudged at 3 percent and revenue growth has slightly declined—indicating lower profit margins—in the past year, the company remains highly profitable with a 19 percent profit margin thanks to its niche space.

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  • The company’s $1 billion in net debt against a $50 billion market cap is also a great sign of financial strength to handle the next economic downturn.

    Action to take: This insider buy has come after shares have run up 43 percent in the past year—and as shares have hit a new all-time high. Trading close to 30 times earnings, investors may want to hold off on following this trade until shares pull back a bit, say to under $195 per share.