Air Products Surges after Naming Rockwood's Ghasemi as CEO - Analyst Blog

Shares of Air Products and Chemicals Inc. APD jumped after its board named Seifi Ghasemi its new chairman, president and chief executive officer CEO, effective Jul 1. Ghasemi is currently the chairman and CEO of Rockwood Holdings, Inc. ROC.

Air Products' shares shot up as much as 8% following the news to hit a new 52-week high of $131.48. The stock eventually closed at $130.72 yesterday, gaining 7.5%.

Ghasemi is a skilled leader with immense experience in managing a global portfolio and exposure in industrial gases, specialty chemicals and advanced materials industries. He worked with Rockwood from 2001 and also held a number of eminent positions in renowned global industrial companies, including the chairman and CEO of GKN Sinter Metals, Inc., and a number of senior roles with The BOC Group, which is now part of Linde AG.

Ghasemi, who has a reputation of achieving higher shareholder returns and financial performance, was appointed as a member of Air Products' board in Sep 2013. Ghasemi will succeed John E. McGlade who served as the CEO of Air Products for 40 years.

Air Products, which remains challenged by high energy costs, had been under pressure from activist investor Bill Ackman – a major shareholder in the company – to make changes in its management. Ackman, in Feb 2014, said that Air Products' stock could double in the next few years (to a $200+ territory) should it appoints the right CEO.

Air Products benefits from a diverse customer base, sustained pricing power and cost-reduction measures. New business deals and strategic investments are expected to support results in fiscal 2014. Moreover, the acquisition of a 67% stake in Chilean industrial gas company, Indura S.A., has ushered in substantial growth opportunity for Air Products.

Air Products is also keeping a tight control on expenses and undertaking work process improvement initiatives. Moreover, it remains committed to maximizing shareholder return.

Air Products currently carries a Zacks Rank #3 (Hold).

Some other stocks worth considering in the chemical space include Compass Minerals International Inc. CMP and Koninklijke DSM N.V. (RDSMY). While Compass Minerals sports a Zacks Rank #1 (Strong Buy), Koninklijke DSM has a Zacks Rank #2 (Buy).